Hardware
Since I am working with online brokerage companies, and online trading platforms, it is my intention to focus squarely on online (or, more precisely, discount brokerage) investing. As such, the very first step for any interested investor/trader is to ensure that he or she has a reliable, safe and, preferably fast computer and Internet connection.
Over the years, I have purchased most of my computers from Dell’s online factory outlet. I have been lucky to find some exceptional deals at the outlet store, but I would recommend that you know precisely which type of system you wish to purchase before you start shopping. Basically, know your price range and the type of features you would like to have before you commit to purchasing a system.
For example: Do you want a laptop or a desktop? How big should the monitor be? How big a hard drive do you wish to have? Do you want a MAC or a Windows based machine? The list goes on and on. I know that for many of you this will sound very basic and, perhaps, not worthy of any though. But I also know just how intimidating the process can be for some. Go a little bit deeper than the basics and shopping for a computer can begin to sound like an alphabet soup of technical acronyms and computer geek jargon. Don’t be intimidated, however. If you need some help with the technical terms there are a couple of great online dictionaries to assist PC Magazine and ComputerUser.com.
Brokers
Presently there are many online service providers from which to choose, and their fields of specialization are fairly
Each of the above links will take you to the main Websites where you can search for the latest broker reviews. The American Association of Individual Investors will require a membership to obtain the review, but the annual subscription price is a very reasonable $29.00. Also, performing a Google search will pull-up the latest reviews from Barrons and SmartMoney along with a host of others. vast. Fortunately, there is a tremendous
amount of information available on the Internet that can help make your broker selection decisions much easier. Some of the better and more reputable services I have found are: AAII, Barrons and SmartMoney.
My personal favorite brokers are Interactive Brokers, optionsXpress and Fidelity, pretty much in that order. My reasons for such contentment are as follows:
When it comes to commissions Interactive Brokers (IB) has the lowest fees I have seen thus far. Its fees are, however, based on an à la carte pricing structure which means that you will pay extra for certain features like real-time market data if you do not meet certain criteria. For example: If you make $30.00 worth of trades per month (approx. 30 trades) then the real-time market data fees are waived. If, however, you make no trades per month, then your account will be debited $30.00 for the data feeds. But you do not have to subscribe to the feeds at all. In that case there is a $10.00 minimum trading fee applied each month if you make no trades at all.
When I first opened my account with IB the only choice I was offered for market data was the real-time data that you get for the $30.00. Now, however, everyone is entitled to delayed quotes if you choose not to subscribe to the real-time data.
With regard to its technology, IB’s trading platform, in my opinion, is second to none. Be careful, however, because matched trades (i.e. when a buyer’s offer is the same as the seller’s selling price) execute at lightening speed. So, if you make one wrong click of the mouse you can find yourself in a trade that you did not intend to make. Once mastered, however, the system works like a charm.
With optionsXpress you get a tiered commission structure – one commission for thirty-five or more trades per month, and the other for less than thirty-five trades per month. But real-time data is free of charge. When it comes to options trading and options information, optionsXpress rules the roost. This is where I go for all of my options data.
Fidelity is another company that has a tiered commission structure that, more recently, has come down in price. There is a plethora of research information available to its clients and its customer service is impeccable and readily available. This is where I house my IRA accounts.
The information I offer here is very cursory and based on my own experiences. I encourage everyone to do his or her due diligence when it comes to selecting a discount broker that is right for you. In most cases it will be a long-term relationship between you and the company, so do your homework and try before you buy. Most large companies will offer you access to other areas of the sites and most have “practice” trading accounts that you can utilize before you are ready to invest or trade your hard-earned money.
Within my site, and with regard to the various information I provide, all will be based on my experiences with the three companies listed above. If ever there is a specific points, or certain areas that I wish to direct you attention, then I will be certain to highlight such information.
