Hi,I am in the early stages of forming an investment club and would like to know how a club chooses a brokerage firm. What criteria did you-all use? Was pricing the main issue? Access to a broker? Convenience of the services? Any pitfalls we should avoid?Thanks,Amondi
"What criteria did you-all use?"For are mutual fund we went with a recomindation from our lawyer.As far as getting into the flow of things I went with ameritrade because of the commission price.Which turned out to be very unreliable at first but they were doing work on there site and it upset a few people .but the site is now being fine tuned and they have set policy for same pricing if the web site is down through a telephone broker.the trades can be very fast.as far as the real time quotes are concerned its a little slow working around still having to get one quote at a time but they are free quotes.and plenty of them for me i guess.i may use at the most 30 or 40 a day and for every trade i get another 100i have like 7000 now .If you can find a brokerage with a fast reliable real time quote service you will probly do best online .the olny way around this is to subscribe to a real time quote service at 55 - 100 + dollars a monthmost of the quotes i get are 20min delayed quotes.save for the real time i get free from ameritrade.one at a time its kind of like loading a web page each time you request a quote.It sucks! it costs me money even some times.but i still like the trade. markpitfalls hmmm do the reserch yourselfdont sink a bunch of money into a get rich quick tip from cnbc or somthing.I am about 700.00 poorer for that very reasonsometimes they are a little late in reporting when a stock is going up and you find it has hit its high and wind up buying as its going down.( it was a new ipo was at 24 and going down but they gave me the impression it was going to go go go .it had reached 28 and was falling.)but i had bought before i had fully investagtedlook for the cycles when a certain stock is up and down. some take more then 2 months to hit highs and then another to hit there lows. with olny a 4 or 5 dollar diffrence in that time.others up $15 - $20 every 2 -3 weeks regularly.watch your splits the price tends to be high just before the split and then drops afterwards.but after the split the stock seems to be up 10%then before the splitfor example ......you just buoght 100 xyz @105 or10500xyz is selling at 90 - 110 a share and anounces it will split on monday the 10th of the month.xyz begins to climb to 135 friday and opens at 135 monday morning 13500 or 3000 upthe split takes effect before trading is open so you recive 2 shares for every 1 you have or 200now worth 67.50 each ( but you have dubbled your holdings as well so if the price gos up 1 then you get 2)but remember the stock was cycling at 90 - 110 before the split was announced.the stock drops monday from 67.50 to 42 (42 + 42 = 84)8400 down 2100 yikeseventually split stock tends to work its way to the original trade price before the splitor to 10% greater then the origional cycle in this case the cycle was 90 - 110 b4 the split the same cycle would be 45 - 65 after+ 10% or 50 - 70 but you will be waiting for a month or 2 for your holdings to break you even.but i am new to investing myself and the market hasn't been peforming to well the last few months.and stay out of reverse splits they take away your holdings and you will feel like you have just beenrobbed.i hope ive helped in some unknowen way.
WE CHOSE FIDELITY FOR CONVENIENCE. THEY PAY INTEREST, YOU GET A MONTHLY STATEMENT, AND IT MAKES IT EASY TO DO YOUR BOOKKEEPING AT THE END OF THE YEAR. THE CLUB CAN ALWAYS CHANGE AND GET ANOTHER BROKER IF WE WISH.
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