So, you’re wondering where to buy stocks online. Maybe you’re looking to make the switch from a flesh-and-blood broker. That makes sense — flesh-and-blood brokers might be so-named because they’re human… or because they extract about a pound of the stuff on each trade.
Or maybe you’re looking to buy your first stock and curious about where to buy stocks generally.
This can feel sorta overwhelming. For one thing, there are at least three dozen online brokers, probably more. And, for another, you’re forced to grapple with word salad levels of new vocabulary.
There’s this saying on Wall Street, “What everyone knows isn’t worth knowing.” But I think a more cynical rendition is more accurate — “Know-nothing clients are the one’s worth knowing.” The less you know, the more commissions your vampire, er, I mean broker, can bleed out of you.
The less you know, the better off they are.
Like Ben Franklin said, “An investment in knowledge pays the best interest.” So in pursuit of that goal, I put together the following comparison matrix. The idea here is to take the same level of neurotic research that I did before picking my own online broker and make it 1) more visually friendly and 2) more rigorous.
If you just want to read my final recommendation, scroll down to the end.
Comparing Online Brokers
|Cost Per Trade||$4.95||$4.95||$4.95||$9.99||$7.00|
|Mobile app?||Yes||Yes, $50/month||Yes, iPhone only||Yes||Yes|
Where To Buy Stocks Online: My Final Recommendation
My final recommendation: TradeKing.
This is my online broker and the one that I recommend to all of my friends, and the one that I myself use.
Think about it: when you trade a stock on Scottrade or TradeKing, the same stuff happens. Scottrade doesn’t have some special juice, some kind of je ne sais quoi. Their services are identical.
Online brokers a commodity. You want to go with whatever is cheapest. It’s like buying gasoline.
And small differences in cost per trade add up over time. They become substantial.
If you make only 20 trades per year, with TradeKing, that will cost you about ~100 dollars. With the most expensive option, E*Trade, those exact trades will cost you 200 dollars.
The gap widens over time.
Oh, and the reason I chose TradeKing over the other low-cost brokers, like TradeMonster, is that TradeKing has no account minimum. If you’re not looking to invest tens of thousands of dollars with a right now, for TradeKing, that’s no problem.