Choosing a stock broker can
be an annoying task. While
they all seem the same, there
are differences in
commission rates that you
should be aware of.
Depending on the type of
investor you are, you may end
up paying too many fees
depending on the broker you
choose. Here are some tips
for choosing the best stock
broker, depending on the type
of investor you are.
1. Casual investor. If you are
casual investor with a
moderate amount of capital
($200k or less), then chances
are most of your money is in
ETFs or index funds. In this case,
a discount broker is fine. You
will rarely make many trades
and you do not need much
advice since you are just
investing in standard, safe
investments.
A brokerage like TD Ameritrade
is good for you since they have
$9.99 trades.
2. Frequent trader. If you are a
chartist, then finding a broker
with low fees is a very high
priority. Most discount brokers
will give discounts to people
who trade frequently. One
example is E-trade. Another site
like Interactive Brokers might
be good for you too. Be careful
with this sort of investment
style, as fees may gobble up all
of your profits!
3. High net worth investor. If
you have $1 million+ in the
stock market, then chances are
you
can get a discount on how
much you pay per trade. This is
especially the case with the
established, big firms such as
Fidelity. Fidelity offers $8 trades
to those with $1 million+ in
their Fidelity accounts.
4. Short seller. If you plan on
selling many stocks short, you
need a broker that has access
to these shares so that you can
short them. Most of these
brokerages will be able to short
mid and large caps for you, but
many do not have access to a
large percentage of the small
cap stocks. Interactive Brokers
might be the best broker for
short sellers.
No comments:
Post a Comment