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