So, you want to start investing but aren’t exactly sure where to start. Your first step should be to locate a good broker. A good brokerage company should offer low fees, good customer service, and have a solid reputation. There are a number of brokers that cater to the small investor. These discount brokers do not require you to start with a whole lot of money. All you need is a couple of dollars to get started and you will be on your way to making your billions like Buffett.
Here is a list of the best online discount brokers for your money.
Investors with $499 or less
If you have $100 or less and want to slowly build up your portfolio then you should look for low cost discount brokers. I prefer Sharebuilder and BuyandHold. These sites are great for teens, young adults, and novice investors. You can add to your investments every month and build your position up to $1,000 or more. Sharebuilder charges just $4.95 for every purchase and Buyandhold is $6.99 per month. The $6.99 monthly fee includes 2 free stock purchases.
Investors with $500 – $999
Those with $500 to invest should look for low fee discount brokers with a few more services. These investors should take a look at Scottrade and E*trade. You need a minimum of $500 to open an account but you get a plethora of investment options. Stocks, bonds, options, exchange traded funds, and mutual funds can all be bought at these brokerages. Scottrade is the cheapest at $7 per trade but E*Trade has a few more options for its $9.99 per trade. Fees drop to $6.99 for frequent traders.
Investors with$1,000 and up
Investors with $1,000 or more to invest have even more investment options. The best brokers for those with this amount are Fidelity, TD Ameritrade, and Charles Schwab. There are more banking options, better customer service, and even more research tools. Analyst reports and research reports can be very useful tools in making your investment decisions. An informed investor has a better chance of picking a winning investment. Fidelity charges $7.95 per trade, E*Trade charges $8.95, and TD Ameritrade charges $9.99 a trade.
My Opinion
My favorite brokers are BuyandHold, E*Trade, and TD Ameritrade. I have accounts at all three brokerages and enjoy using their services. I use BuyandHold to make small incremental purchases and the other brokers for larger purchases.
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