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Author: tobyas132 One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 2674  
Subject: Brokerage Date: 2/28/2008 11:03 PM
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Yes..yes...sorry for inturupting...the poll...well um...the thing I was worried about brokerage was that they actually had a minimum deposite...so I was wondering if anyone could give me infromation about the brokerages you guys use... Im going to use a castodial account...lol so if anyone could help! HELP!

thx alot~

tobyas132
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Author: mrparrotfez Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 2007 of 2674
Subject: Re: Brokerage Date: 2/29/2008 1:42 AM
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Most brokerages have some form of minimum. Scottrade's is $500. That's where I usually suggest new investors start. True, there are some things you give up with Scott that you get with a higher level of broker; but the bottom line here is to begin accumulating assets and knowledge. One may do that at Scott with $500. (Although I would hasten to add that purchases of stock in that amount will eat you alive on commissions even at Scott's very reasonable $7.)

I use Fidelity, but I used to use Scott, and it had some compromises I eventually couldn't accept. Fidelity I think requires $5000 to start, and at that level you really don't get very advantageous terms. In my ideal concept, someone would start with Scott, and would switch to a higher level of service and choices when one had made enough money. That's tough on Scott, but I remind them of what their representative told me when I learned the hard way that I couldn't reinvest stock dividends. I told him that I couldn't imagine that a serious brokerage didn't allow that. His response: "Well, we're a discount brokerage." Translation: 'You get what you pay for, bub.' So fair enough.

A lot of people use online-only brokers like Zecco and Sharebuilder, on the grounds that they have the cheapest trades. Personally, I think wealth is too important to hand off to brand new names when one could sign on at Scott for a minimum far less than anyone should use to buy a lot of stock in the first place. I also couldn't imagine the idea of dealing with a broker who doesn't at least have offices one may walk into and get help on some level. If people are comfortable with it that way, I guess, more power to them...but I'm not.

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Author: tobyas132 One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 2013 of 2674
Subject: Re: Brokerage Date: 3/1/2008 11:23 AM
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Hello mrparrotfez and thank you! haha um.. yes I thought of using Fidelity because of...my friend used it..but because you said

"Scottrade's is $500. That's where I usually suggest new investors start."

Im thinking of going for Scottrade...yes its a shame that you cant reinvest dividends...but...Im happy with a $500 minimum..!

Thank you!

tobyas132

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Author: mrparrotfez Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 2015 of 2674
Subject: Re: Brokerage Date: 3/1/2008 11:48 AM
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Glad to help, tobyas. Really, I think you get what you pay for. Some people are okay with Sharebuilder, which places weekly orders. Some, gods love them, don't feel comfortable with anything less than a full commission Merrill Lynch broker. I think they're intoxicated, but they exist. For small investors, I think the wheelhouse ranges from Scott (some compromises but real offices and a real brokerage that isn't just a server farm) to Fidelity (very few compromises, but you pay a little more for that). That would include Schwab, I suppose TD Outhouse, and some others: anyplace that has real offices. Now, sure, you can probably start an account at Sharebuilder with $10. But you shouldn't. It is always essential to take a very icy look at your commissions as a percentage of your investment, because they DO eat away at your returns. And by sending Scott $500 and buying one stock for $7, you have already lost about 1.4% on your investment. Now suppose you had played it really smart, saved your money and bought only when you had $1500. Your commission loss is less than 0.5% of your investment. Very good! Far superior.

The tough part is tempering eagerness with good money sense.

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Author: mrparrotfez Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 2016 of 2674
Subject: Re: Brokerage Date: 3/1/2008 12:15 PM
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PS. Want to read some experiences with Zecco, so that you know what you're missing out on while everyone else rushes there to shave a couple bucks off the cost of trades?

http://www.bargaineering.com/articles/is-zecco-a-scam-or-legitimate.html

Some might be exaggerated, but if even half of those are literal truth, it doesn't sound good.

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