When it comes to investing, it’s important to consider your options, and make decisions that are likely to help you now — and in the long term. One of those choices is investing with the online broker that is right for you. Here are a few things to think about as you choose an online broker:
One of the first things to look at is what the broker charges in terms of investment costs. You will always have to pay some sort of transaction fee or commission. Most online brokers, though, will just charge you a flat fee when you make a trade. Check the flat fee, and make sure you understand what your costs will be.
Also, check for higher fees for real-time trades, as well as the costs associated with over-the-phone consultations. Consider what services you are most likely to use, and the costs associated with them to help you figure out how to get the best possible value.
Available Investment Research
When you are making your own decisions, and directing your portfolio, it becomes quite important to make sure that you are taking full advantage of the investment research available to you. Does the online broker offer you a large amount of research? This can be important if you are looking for the tools you need to make the right decisions for you. Double check the type of research offered, and its completeness. In some cases, it is worth it to pay a slightly higher transaction fee in order to take advantage of better research and other tools.
Web Site Usability
Another important consideration is the web site usability. Do you have access to the trading tools you need? Is the interface intuitive? If you have questions, can you quickly reach someone via instant message chat? Think about the items that are most important to you when it comes to user experience on a broker’s web site. Choose a site that fits your needs, and offers the tools you need to be a successful investor.
Variety of Options Available
For most “boring” investors, most online brokers are sufficient. Many online brokers offer access to individual stocks, index funds and ETFs. In most cases, you can also open an IRA via your online broker. However, it’s important to realize that some more complex investing options may not be available through an online broker.
If you are looking for more advanced options, you might want to go through a major stock broker. You can usually sign up online, and manage your account via the Internet, but still have access to full-service brokerage options. You might also find that a broker that can help you buy the more complex financial instruments that you might not have access to through online-only brokerages. In some cases, it works better to interact offline with a broker who can help you meet your more advanced needs.
Your first step is to figure out exactly what you want to accomplish with your investment portfolio. Consider your long-term objectives, and research different brokerages. For most people, an online brokerage is the best option, since it is low-cost, and it will allow you to make your own decisions with investments that are relatively easy to understand. For those who are a little more advanced, however, it might make sense to get the help of a broker, or pay to use a site with more investment options.