Full-$ervice Brokers

Where discount brokers typically charge between $5 and $30 for an individual online trade, you'll probably pay around $150 for the average trade done through the typical over-priced broker.   I mean full-priced broker.   Did I say that?   I really meant to say Full-$ervice broker.   Furthermore, Full-$ervice firms often charge annual "maintenance" fees through which they grant themselves a generous slice of your assets, say about $150 a year or more.   Alternatively, Full-$ervice brokerages might grant "unlimited free trades" in an account, but will charge you around 1% to 1.5% of your total assets -- per year!   In other words, Full-$ervice brokerages provide help at a VERY HIGH cost.

So do you get twenty times the value by using one of those expensively dressed souls who work for Merrill Lynch, Salomon Smith Barney, and others?   I don't think so!   Most brokers who give advice are just glorified salesmen, shopping around their brokerage house's stock picks or pricey mutual funds.   Brokers are getting paid a percentage (the commission) for every sale they make.   Here's the bottom line...   If you don't have a few hours a week, and if you have the money, go for it!   I'm betting you can spare a couple hours a week.

Another problem is that Full-$ervice brokers usually receive commissions on each trade, so their compensation is closely tied with how often their clients' accounts are traded.   In other words, part of the commission YOU pay to the firm may wind up directly in your broker's pocket.   So your Full-$ervice broker may be paid not for how well your investments perform (which is in YOUR best interest, obviously), but rather on account activity (more often than not, in THEIR best interest).   This is highly distressing.

Discount Brokers

I've given you many reason why I wouldn't use a Full-$ervice broker.   How do you go about selecting a discount broker?   Well, what do you want to trade?   If you want to trade the OTC/BB (NASDAQ Over The Counter/Bulletin Board) stocks, you can reduce the number of choices down to six.   If you want to trade commodities, you only have one to choose from.

Before I go on, let me explain that there are hundreds of companies on the Internet that are discount brokers.   I've only listed ten of the companies here.   When I say, "you have one to choose from," I'm only talking about those companies that I have listed.  

I made up one of these chart a few years ago when I was selecting a discount broker.   I found it to be very useful, and I'm sure you will too.   One thing that I don't have here is a comparison of server down-time -- the inability to make a trade.   I will work on getting that number to you as soon as possible.

If you are planning to trade IPOs, you may want to reconsider those plans.   I've got a friend that has "access" to IPOs.   He has to enter some kind of lottery to get in on one of the opportunities.   He has been trying for the past three years, and he has never been selected.   He pays twice the commissions on a limit order, than I do, just to have access to these illusive IPOs.

Minimums
Open account	2000	5000	No Min.	500	1000	2500	2000	No Min.	500	1000
Commissions (stocks)
Market order for 1000 shares	8.00	29.95	20.00	9.99	14.95	25.00	29.95	14.95	7.00	12.00
Limit order for 1000 shares	13.00	29.95	20.00	9.99	19.95	25.00	29.95	19.95	12.00	15.00
Market order for 5000 shares	8.00	149.95	100.00	9.99	14.95	105.00	149.95	14.95	7.00	12.00
Limit order for 5000 shares	13.00	149.95	100.00	9.99	19.95	105.00	149.95	19.95	12.00	15.00
Max Number Of Shares Per Order Without Additional Fees	No Limit	1000	1000	5000	5000	1000	1000	5000	No Limit	5000
Commissions (options)
Additional Fees Over The Standard Commissions On Stocks	none	none	15.00	none	none	?	none	15.00	none	yes
30 Option contracts (price per contact)	1.75	2.00	1.75	1.75	1.75	?	1.80	1.75	1.50	1.25
Account Features
No inactivity fee
FREE unlimited real-time quotes with basic account
FREE real-time streaming quotes with basic account
After hours trading
Wireless alerts & trading
NYSE, AMEX & NASDAQ stocks
OTC bulletin board stocks
Mutual funds
Options
Bonds
IPOs
Commodities
60 second execution guarantee
Research tools

Once you have selected a discount broker, sign up, send in your money, and you will be ready to trade.   You will be amazed how easy it is to open an online trading account.   If picking a stock was this easy!

Don't even ask me which one I picked!   You need to find the discount broker that is right for you.