Who do I trust with my money?

October 15, 2015 2:39 PM

Which online brokerage service do I open an account with? Who do I use? Scottrade? E-trade? Someone else?

I have about $12,500 I'd like to seed the account with, and an additional $3,000-$6,000 annually I'd like to start putting in individual stocks.

I already have a maxed Roth IRA, an employer plan, and additional supplemental index funds.

Now I would like to do some minor long term purchasing of stock. This is not a question about day trading.

Basically, at the amount I am planning to invest, and the frequency I intend to trade, the cost per trade or the sign up bonuses aren't a big consideration. Services, ease of use, information, and customer service are. I intend to be a self directed trader. If I don't see anything I want to buy I may sit dormant for a year or more.

Basically, I have $500 left over at the end of the month (every month) and I'd like to do something with it. I have no debt and do not plan on purchasing a home any time soon (probably ever). I've decided this is what I want to do with the money, and realize there may even be better places to park it (like additional mutual funds). I'm willing to lose every cent of this money (but would rather not obviously).

posted by cjorgensen to Work & Money (11 answers total)

What *is* the frequency with which you're going to trade, though? Are you going to buy $500 worth of one stock each month, or are you going to be buying multiple stocks, selling stocks and/or rebalancing? Or are you saving up that $3-6K and investing it once a year? Those 7 dollarses can add up. But I do get that psychologically it's nice to feel invested in real companies!

Regardless, I like my Vanguard brokerage account a lot, although I am an index fund investor. I trade a few times a year (I mean I put in money every month but I sometimes also make trades for rebalancing or tax loss harvesting) and it always goes very smoothly. So I'm putting in a vote for Vanguard. Super easy to set up. I don't think I've ever had cause to call them, so I can't speak to the customer service in that way, but it all just works.

Or: where is your Roth held? It might be easiest to go with the same organization, unless you really hate the one you're using now.
posted by mskyle at 2:59 PM on October 15, 2015 [4 favorites]

Yeah, the "wherever your Roth is held" isn't a bad way to go. Back when ING existed as an online bank, I rolled over an IRA into their investment portal (Sharebuilder) because it was linked to the checking/savings account portal that I liked, and I liked how easy it was to move money around. That, and the fees weren't bad. I now have a number of brokerage accounts with Capital One 360 (they bought up ING) - a Roth IRA, traditional IRA, and taxable investment account. And the ease of use and single portal access is plenty to keep me there.
posted by craven_morhead at 3:07 PM on October 15, 2015

I've been using Tradeking since about the week before the crash of 2008. By far my favorite financial service compared to other stuff I'm stuck with for company retirement accounts etc. There is never really any pushy BUY OUR EXTRA SERVICES stuff. I remember maybe a splash ad once when they launched managed portfolios, but that has been it. The few time's I've had to deal with customer service its been easy and prompt.
posted by kpraslowicz at 3:36 PM on October 15, 2015 [1 favorite]

If you're not going to be doing your own allocations, you could check out Vanguard target date or investment allocation funds (through the Vanguard site) or one of the roboadvisors out there. Wealthfront and Betterment are two of the more popular. They charge 25-50 bps and invest in 6-8 low cost ETFs (typically Vanguard).

I use betterment and like it a lot. They'll do automatic tax harvesting, which you won't get in a target date fund. My tax savings from the loss harvesting will pay for a few years of fees alone.
posted by jpe at 3:39 PM on October 15, 2015 [4 favorites]

Response by poster: What *is* the frequency with which you're going to trade, though?

Probably once a year or so. I only intend to buy stocks I intend to hold for 5+ years. Basically buy and forget, and if I bet wrong, well, I bet wrong. Not going to panic sell.

[…] where is your Roth held?

My Roth is held through Thrivent Financial. They offer brokerage services, but they are expensive and come with annual fees, inactivity fees, trade commissions, and a cost per trade. They suggested I go elsewhere (which is one of the reasons I like them).
posted by cjorgensen at 5:15 PM on October 15, 2015

It may not be what you're looking for, in that it might be too hands off and automated, but I like Betterment.

PM me if you'd like an invite link where you get an additional $10 in your account when you open it.
posted by Major Matt Mason Dixon at 5:16 PM on October 15, 2015

If you were going to buy ETFs I would have recommended Schwab. They have low minimums balance requirements and hardly any fees (free transfers, free checks, free atm withdrawals from any ATM in the world, etc). On top of that when you buy their low cost ETF funds they don't change any commissions for the trades. They also have good customer support lines. But they would charge around $8 per trade, which is reasonable, but not amazing.

If you are only going to be buying and selling stocks, I'd recommend Robinhood , since they charge no commissions on buying and selling stocks. They are a bit no frills about other services, but if you purely want a company for buying and selling stocks, it's hard to do better than them.
posted by vegetableagony at 6:53 PM on October 15, 2015

I have accounts with TD Ameritrade and Fidelity for stocks. They are not the cheapest but reasonably priced for non-day traders and both have had excellent "call and speak immediately to a person who will solve your problem" type customer service any time I've needed them. They both offer a decent selection of no-cost to trade ETFs. TD will do a synthetic DRIP on anything that pays dividends. I believe Fidelity does as well but am not positive.

Between the two, I think Ameritrade has the better user information and has a good variety of data on stocks and funds available through the website. They also have the Think Or Swim platform for more advanced stuff.
posted by Candleman at 9:26 PM on October 15, 2015 [2 favorites]

I was very happy with Tradeking for similar investing (buy and holding a few individual stocks) for several years. Some situations in life changed, so I moved the money elsewhere once my stocks hit the targets I set, but for investing that way again, I'd go back. It's a bit bare bones relative to some firms (like I wouldn't count on 24/7/365 phone/chat availability), but the fees are really damn low and I never had trouble getting anything done there that I wanted to.
posted by eelgrassman at 10:02 PM on October 15, 2015

If Scottrade has an office in your city, it's a good option because you can call them instead of the main support number, they'll mail things or leave them for you to pick up, etc.
posted by michaelh at 8:46 AM on October 16, 2015 [1 favorite]

Response by poster: Just as a follow up: I opened a Scottrade account and purchased 100 shares of AAPL. I plan to add a company a year until I retire. This is a supplemental investment and not my primary vehicle for investment (I have my 403b and my Roth and two additional index funds). It was fun to do this and I don't plan on putting any money in here that I can't afford to lose.

I decided to go with Scottrade because of the physical locations and because they have a decent iOS app and their website doesn't suck.

Thanks for the input!
posted by cjorgensen at 7:38 AM on January 11, 2016