Companies I've Researched for Investing Online
I recently had a good friend ask me about which company I use for online investing. I told her I'd write a blog post about it and list the ones I investigated. So here we go! There was a time in my life when friends, co-workers or articles that I read inspired me to purchase certain stocks. I also wanted to start a ROTH IRA beyond my company 401K and my rollover traditional IRA. However, it seems that I never made the move on these inspirations because I didn't know how to make it happen. The idea of going down to my local credit union branch or paying my financial advisor to create a ROTH IRA wasn't appealing. I wanted full control with little to no fees. Also, I had absolutely no idea on how to make individual stock purchases, outside of my company's stock. My partner and I sat down one day and finally decided we needed to find the best online options for what we wanted to do with our money.
One of the incidents that triggered this decision was our inspiration to purchase Panera Bread Company stock. They started selling non-GMO food, and we wanted to be supportive of a nationwide restaurant finally getting on board. I put off buying the stock because I hadn't set up my account online yet. Sure enough, a couple months later I read an article stating that Panera Bread Company went private for $315 a share. When I was looking at the stock it was around $225 a share. That would have been a nice first stock purchase, but again, because I wasn't ready to pull the trigger when I had the thought, it never happened.
For those of you who are like me, a stock market amateur, motivated to take your investing to the next level, here are the results of my research. As a reminder, this is solely my opinion, as I'm not a certified financial planner. This list doesn't include all the options available to you, but it does have the heavy hitters in the online investing world.
www.vangaurd.com - You need a $3,000 minimum to invest in mutual funds. To buy individual stocks they charge $7 each for the first 25 trades, then $20 after that. I couldn't get a clear answer on their fees for their mutual funds.
www.fidelity.com - their pricing is so clear, they put it in a simple table on their website. They call it straight forward pricing. This is the company I chose. See rate's in the above image.
www.tdameritrade.com - It costs $6.95 per trade online and $45 a trade w/a broker. No Load Mutual Funds are $49.99 and the other Mutual Funds are commission free. But watch out for other fees that could be hidden, like 12b_1 fees.
www.etrade.com - they have a flat advisory fee of .3% for accounts with over $5,000 a year. Their cost per trade is $6.95 plus another $25 if you need a brokers assistance.
www.scottrade.com - has moved to TD Ameritrade.
www.schwab.com - Charles Schwab offers $4.95 per trade and has a $1,000 minimum on some mutual funds. But it's free to open an IRA.
After reviewing the above information and more from their websites, I settled on Fidelity.com. Most websites make it difficult to find exactly what would be charged to manage your mutual funds in your IRAs or other investments. Make sure to study your statements to see what fees are being charged to any mutual funds you purchase. It is usually a percentage of your balance. Refer to my blog post on sticking with S&P 500 stocks over the average mutual. https://www.atgfinancials.com/home/2018/5/1/how-much-is-your-retirement-costing-you
S&P 500 stocks are managed less as they stick with the top 500 companies in the nation. Studies show that paying the fees for a "managed" mutual funds makes you less money over time, than just letting your money sit in the S&P 500. I recommend reading "The Little Book of Common Sense Investing".
Now that I've quit my corporate job, I was able to transfer my company 401K over to my fidelity account easily. All my money is in one place, and I didn't have to pay a financial advisor to do the transfer for me. I feel more empowered to buy the occasional stock if I feel it has potential, and to invest steadily into my ROTH IRA each month which is invested into the S&P 500.
Once I set myself up online to purchase stocks and manage my ROTH IRA or other investments, I found myself reading more about investments, and growing my knowledge base. I am finally in full control of my investments and am excited to drive for a while. I pulled myself out of the stone age, where I thought I had to hire a financial advisor or work with my bank to set up retirement accounts for me. The power of the internet has allowed us to avoid many of the fees that were unavoidable before.
If you haven't set up your investment accounts yet, I highly suggest you do so. Most companies listed above are user friendly, and rather intuitive to make trades. Fidelity also has great customer service, especially when transferring over old 401k's. Don't let yourself be intimidated. Take your place in the driver's seat and start investing in your future.