Any reccomendations for online traders with low minimum starting balances and good learning tools for beginners?

November 15, 2004 2:16 PM

I've saved a little bit of money and have decided to invest it in the stock market. I don't have alot to invest but it is certainly something I can and plan on building on.The question now is what online trader to go with. Any reccomendations for online traders with low minimum starting balances and good learning tools for beginners would be greatly appreciated.
posted by ttrendel to Work & Money (7 answers total)

From the way I read your question, you're looking to invest - to save and build a pool of money - rather than to speculate - to "trade" stocks relatively often in the hopes of buying low and selling high and thus making money.

If I'm right, you probably don't want a "trader" at all, at least in the E*Trade day trading sense. You'd be better off with some kind of passively-managed index-tracking mutual fund with minimal fees, like the ones from Vanguard, rather than buying up individual stocks.

If you don't already know all of the above, read A Random Walk Down Wall Street before doing anything.
posted by tirade at 2:37 PM on November 15, 2004

Second the recommendation for an index fund, or for an exchange-traded fund of the same type (e.g. SPDR for the S&P 500 index).
posted by kindall at 3:17 PM on November 15, 2004

May I strongly recommend Andrew Tobias' The Only Investment Guide You'll Ever Need. Really. Buy it now. It's a slim, easily accessible and amusing book full of sound financial advice, including an endorsement of the counsel in tirade's second 'graf.

After you read that, you can get Random Walk and other more advanced investing titles. But start with The Only Investment Guide You'll Ever Need. Trust me on this.
posted by mojohand at 4:06 PM on November 15, 2004

I use BuyAndHold.com. It's a website tailor made for investing of this ilk. People who subscribe to the buy and hold strategy get in early (with only a little cake) and they get in often. Buy index funds, or other bluechip stocks (not every stock is listed) -- but at rock bottom $3 / trade fees. The trades are made at intervals on the day you buy, instead of at the second you hit the button. If you're investing for the long haul, an hour won't (ok, shouldn't) really matter.

The place is light on the research end, but books and other websites can help you there.

Buy and Hold also lets investors buy in round dollar amounts -- the only site I know that does this. So you can buy $50 of Google, even if you can't afford a single whole share. This is a great feature that keeps me plugging away with my very small bets.

Another similar brokerage is ShareBuilder. Happy investing.
posted by zpousman at 5:18 PM on November 15, 2004

What tirade and kindall said.
posted by pmurray63 at 7:39 PM on November 15, 2004

Similar question here.
posted by fuzz at 3:51 AM on November 16, 2004

I know it's piling on, but here's a good, very recent article in Slate on why you - and just about everyone else - should think that "invest" does not mean "trade".

(You might want to skip the first three paragraphs; the article starts slowly.)
posted by WestCoaster at 1:10 PM on November 19, 2004