Trading online or through a stock broker ??
Friends, Please suggest your experinces in investing in paper assets. Do you prefer online trading or would like to have stock broker assist/attend to your calls? Which is the best & why? Thanks in advance.
Good Answers (3)
Brett S.
Commercial Manager at Amdocs
Best Answers in: Foreign Investment (1), Venture Capital and Private Equity (1), Personal Investing (1), Professional Organizations (1), Starting Up (1)
The key to this Q/A is whether you intend to simply do transactions (eg buy/sell) or whether you want some other services.
If you only want to do transactions, then definitely go online. Choose the service based on transaction cost and the online functionality (user interface) they provide and the speed and reliability of trade execution.
If you want other services, then explore those services and consider the price premium accordingly. However, much of the addditional services can be provided online also (eg stock research, investment (buy/sell recommendations)). It's only if you really want to talk with a broker or if you expect them to give you proactive trading advice that you may want to take a full-service broking option. Then you have to be sure that their expert advise will be of relative cost/benefit to you (eg versus you making your own decisions).
Some of the features that are important to me are:
- Transaction cost.
- Maintaing (automatically updating) the portfolio holdings.
- Real time price data, market depth data, charts including intraday charts.
- Cash account used for settlements and dividends that pays interest on cash balances.
Some discusson here of online brokers in Australia and Singapore -
http://www.superinvestor.com.au/forum/viewtopic.php?t=22
Brett
It is irrelevant where you trade, as long as your commissions are reasonable for what you are getting. Because brokers do not add value, it makes no sense paying them. However, if you are paying $20 per trade vs. $10 per trade it will not make a difference if you are getting superior service and products from the $20 brokerage, unless you are looking for bare-bones trading platform and you are making multiple trades. I like Fidelity and Vanguard rather than the bare-bones online brokerages for the following reasons:
1) Access to transaction-free mutual funds which are best in the business (Vanguard)
2) Access (transaction free) to some of the best fixed income securities (money markets and CDs) with the highest rates in the business.
So from this point of view, I don't mind paying $20 if I buy ETF funds at Vanguard to complement my mutual funds, if I don't want to open a Fidelity account. Alternatively, if you have both, Fidelity offers $11 transactions for clients with $50k in assets or more. If you don't care about mutual funds, CDs, money markets, like others said, get a discount brokerage account.
There were times (prior to current laws) when it took hours (possibly even days) to have your order filled. Sometimes people found that when they bought a security for $X they later saw it costing them $Y per share, with the difference pocketed by the brokerage (usually the spread was less than a dollar). Nowadays, your order gets executed within minutes or even seconds, so this spread is much smaller.
Hope this helps.
Richard J.
CERTIFIED FINANCIAL PLANNER™ at Krasney Financial, LLC
Best Answers in: Wealth Management (8), Personal Investing (7), Personal Taxes (4), Personal Real Estate (4), Retirement and Estate Planning (3), Equity Markets (2), Professional Networking (2), Using LinkedIn (2), Certification and Licenses (1), Property Law (1), Personal Debt Management (1), Incorporation (1), Starting Up (1)
Ravi,
If you have some knowledge of the markets and are comfortable making trades on your own, then online might be the better way to go for you if you want to save money. Fees are just one aspect that you should be considering in this decision though.
As a Registered Investment Advisor, we make trades on behalf of our clients through our custodian, TD Ameritrade. The Securities and Exchange Commission requires Registered Investment Advisers to maintain "best execution" for their clients. This term includes a number of factors, cost being only one factor. Depending on the size of your orders, price improvement (was the custodian able to imrove your order over the bid/ask price).
If you are just looking to trade a few stocks, online might be a fine choice for you. If there are other things you require (planning assistance, trading questions, etc.), you might consider other alternatives.
If you have questions, send me a free inmail. Hope this helps.
Richard
More Answers (3)
Jim P.
Senior Manager at AT&T
Best Answers in: Personal Investing (9), Retirement and Estate Planning (5), Personal Real Estate (5), Wealth Management (3), Personal Debt Management (2), Economics (1), Hedge Funds (1), Personal Taxes (1), Career Management (1), Wireless (1), Using LinkedIn (1)
I have only used an online broker, (Schwab) as broker assisted trades are very expensive. If I have any questions simply call their 800 number, email or stop-by a local office. Trades execute very quickly, so take time to verify your order before you press the Submit button!
Raghav H.
LION do send out invites my id raghav dot linkedin at yahoo dot com
Best Answers in: Staffing and Recruiting (5), Career Management (1), Using LinkedIn (1)
I am using icicidirect.com since 2000 though the brokerage and other stuff is costly somehow the banking / DP / trading at one go helps me better. BTW i am a long term investor and neither trade for short term not indulge in FnO
Raghav
I personally I rely on myself for research into the companies I invest in, and there for greatly prefer the lower cost of online trading. Currently I invest with Zecco and get 10 free trades a month, which is perfectly suitable for me, but going above this amount is reasonable as well.
