Investments? etrade*

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nismoZtuner
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Investments? etrade*

Postby nismoZtuner » Thu Feb 27, 2014 12:54 pm

So i have been considering investing in stocks and have been looking for a site to invest with. One of my friends who does investments recommended etrade. etrade requires a $500 transfer so that i can use their service and keep my account active.

I have been wanting to buy stocks since high school but haven't been able to start but not i can. i got an idea how buying stocks work in my high school economics class.

-i remember my economics teacher saying never buy "pink".

does anyone have any tips or a better site to invest with besides etrade?
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djrez4
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Postby djrez4 » Thu Feb 27, 2014 2:19 pm

I use ShareBuilder, mainly because it was associated with INGDirect before the CapitalOne buyout. It has good research, as far as I can tell, including Morningstar reports. I pay $4 a trade, buying once a month.

If you plan on managing your investments yourself, your main expenses are cost per trade and expense ratios. Minimize both and invest diversely and you'll be fine.
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Postby JMR » Thu Feb 27, 2014 2:23 pm

I use Charles Schwab. They have a large amount of no fee ETFs that you can buy and sell with no trading fee. The expense ratios are low (all under .2%). IMO well worth it. Paying 8 dollars each way for a trade unless your moving some serious cash is stupid.
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Postby luvbullmarkets » Thu Feb 27, 2014 4:38 pm

JMR wrote:I use Charles Schwab. They have a large amount of no fee ETFs that you can buy and sell with no trading fee. The expense ratios are low (all under .2%). IMO well worth it. Paying 8 dollars each way for a trade unless your moving some serious cash is stupid.


+1 for Chuck.

I'm also with Fidelity, Merrill Lynch, and Wells Fargo Advisors. Don't have complaints with either four.
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Postby MrMosby » Thu Feb 27, 2014 8:04 pm

I use Vanguard for their low expense ratios, although their trading platform isn't as good as some of the others.

But I think you need to ask yourself some questions -

1. Are you doing this to begin saving for retirement? For fun? etc?
2. What is your risk tolerance?
3. Do you understand the different investment vehicles well?

Kind of my spiel I always give is you are almost ALWAYS better off investing in a low expense ratio index fund/ETF.

Why you may ask? Well Active fund managers rarely outperform index funds over a long time horizon (they may in a short time period however), and Active fund managers have access to significantly more resources than an individual investors to use for picking stocks. And I'll be honest, I do pick my own stocks and have done quite well most of the time, but a couple times I've lost my butt as well. Because of this I only invest about 10% of my total portfolio in individual investments/sector funds.

There are some good books out there you should also read. Specifically The Bogglehead's Guide to Investing, The Intelligent Investor, and if you really want to trade individual stocks a good starting point is How to Make Money in Stocks
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Postby otter » Thu Feb 27, 2014 9:01 pm

+1 to all the posters above who gave great advice to OP. My advice to OP is:

  • Learn all you can about investing. There's a lot of different types of investments you can make. Learn everything you can about investing before putting a dime down. Nothing is worse than buying a stock blindly and watching it drop sharply before selling at a huge loss and swearing you will never invest in stocks again. You can make a lot of money, but you can also lose a lot of money if you don't know exactly what you are getting into.
  • There are a lot of good brokerages out there, but some are better for certain investments. I use several different brokerages and hae used several others. Using some of the examples given above.... Merrill Lynch and Sharebuilders are both great for buying individual stocks, but not so good for ETF's. Charles Schwab is great for ETF's As a matter of fact, I would go with "Chuck" because: if you open a checking account, there is no account minimum for the brokerage account, it has no-commission ETF's (which I prefer over mutual funds).
  • Make sure you have enough emergency funds before investing. More than a few times, I've had to liquidate an asset to pay for some emergency only to watch the stock grow immensely right after selling. Make sure whatever money you invest won't need to be touched for a long time.
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Postby MrMosby » Thu Feb 27, 2014 9:08 pm

Make sure you have enough emergency funds before investing. More than a few times, I've had to liquidate an asset to pay for some emergency only to watch the stock grow immensely right after selling. Make sure whatever money you invest won't need to be touched for a long time.


Emergency fund is important, but don't go overboard. Remember the average return on a savings account is .01% annually at most banks, versus an average of 7+% in a well diversified portfolio long term.

Also one thing I want to reiterate, a wise investor once told me: Returns aren't guaranteed, fees are. To put this in perspective lets assume you put 100K in investments and just let it sit (no further contributions, etc) and averaged a 7% return. At the end of 25 years you would have roughly $542K. If you paid 1.5% in advisory/brokerage fees annually that would be reduced to $381K at the end of the 25 years. (And if you're really curious if you put that 100K in savings at .01% instead you would have roughly 100K still).
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otter
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Postby otter » Thu Feb 27, 2014 9:22 pm

MrMosby wrote:Emergency fund is important, but don't go overboard. Remember the average return on a savings account is .01% annually at most banks, versus an average of 7+% in a well diversified portfolio long term.

Also one thing I want to reiterate, a wise investor once told me: Returns aren't guaranteed, fees are. To put this in perspective lets assume you put 100K in investments and just let it sit (no further contributions, etc) and averaged a 7% return. At the end of 25 years you would have roughly $542K. If you paid 1.5% in advisory/brokerage fees annually that would be reduced to $381K at the end of the 25 years. (And if you're really curious if you put that 100K in savings at .01% instead you would have roughly 100K still).


Mr. Mosby is right... I should have clarified since a lot of people do go overboard with an "emergency fund". Personally, I think one or two month's income is good for most people. Anything more than that and you lose vs. inflation.
In my Wallet:
  • Amex PRG NPSL[3-14, bd 91]
  • Sallie Mae MC $8000[1-14]
  • Chase Freedom $4700[1-14]
  • Discover It $2750[8-13]
  • BoA UCF Alumni Cash Rewards $5000 [3-15]
Sometimes in my Wallet:
  • GM BuyPower WEMC $5000[9-14]
  • Wells Fargo Propel 365 Amex $7000[4-14]
  • Barclaycard Arrival WEMC $7000[3-14]
  • BoA Better Balance $3000[2-15]
In my sockdrawer: Amex BCE $1000[10-13, bd 91], OCCU Duck $10000 [11-13], The Sportsman's Guide Visa $8000[8-14], Chase Slate $4000 [9-14]Delta Gold Amex $2000 [2-15 bd 91], Diners Club MC $20000 [10-14] Commerce Bank Visa $2000 [3-15] Citi Double Cash $1000 [3-15]
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JMR
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Postby JMR » Thu Feb 27, 2014 9:29 pm

MrMosby wrote:
Kind of my spiel I always give is you are almost ALWAYS better off investing in a low expense ratio index fund/ETF.



+1

Also commenting on the emergency fund. I agree a couple months is good. You can always dip into a brokerage account (not retirement!!!) if the situation is that severe. No need to park more than 2 months savings in a savings account which gives you .01%. But for my savings account I use online savings through Discover .85% which isn't bad for the emergency fund and I can transfer to my checking account and have it in a couple of days. No minimum balance in that savings account either.

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Postby MrMosby » Thu Feb 27, 2014 9:32 pm

But for my savings account I use online savings through Discover .85% which isn't bad for the emergency fund and I can transfer to my checking account and have it in a couple of days.


I've thought about doing that as well, I just have so much of my other banking tied up with my current bank (Mortgage, Auto Loans, Credit Card, Checking, etc.) I feel like they will get cranky if they don't see some assets in there with all the liabilities. I don't want to be one of the customers that they decide to randomly close all the accounts and sell of my mortgage :-) Maybe I'm just paranoid.
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