With much publicized stocks like Beyond Meat goosing the market beyond anyone’s wildest expectations, it’s easy to see how many people would be salivating at the opportunity to invest in the stock market. But where should you start?
According to financial advisers, stocks — shares of ownership in public companies — should be a part of most people’s portfolio of investments and assets. Fortunately, all it takes to get started these days is a few dollars and an internet connection.
Right now, there are a more than a dozen discount online brokerages that charge less than $7 per trade. They also offer research and allow you to do all the monitoring and trading without the need for a personal broker. Online brokerages range from relative newcomers like Web-based banker Ally to traditionalists like Charles Schwab. The best online brokerages are not only full service accounts, with alerts and company data, but they also will let you set up retirement savings and even offer banking services, including in some cases ATM withdrawals and free bill pay.
Here are our choices for the best reputable online brokers, plus a bonus for socially conscious investors:
Best for: All levels of investors
Fees: $6.95 per trade
Offering one of the widest arrays of options and features, TD Ameritrade delivers a lot in terms of viewing and analyzing your portfolio (if anything, too many options and too many menus). Customers looking to expand their knowledge base will find helpful videos, webcasts and tutorials aimed at both novice traders and experienced investors who want to deepen their knowledge or narrow their focus. There’s no required minimum and the features offered allow you to start as a novice and grow, all the way up to becoming a day trader, with customizable options, right down to the colors on-screen and a real-time dashboard.
TD Ameritrade also has a very flexible platform from which to launch your purchases and sales, allowing you to keep it simple or expand it to include custom alerts, stock picks based on criteria you select, and technical research from hundreds of providers. Want to test your stock-picking skills? TD includes paperMoney, a simulation for practicing trades without losing your shirt. The brokerage also offers some social media integration via Facebook and Twitter for connecting with the service, although we recommend you eschew any such connections for security reasons.
Best for: All-in-One Investors
Fees: $6.95 per trade
E*Trade has been around since the dawn of the internet, and in some ways it looks it. But it’s also one of the most stable online brokerages with a raft of services that will satisfy young, middle-age, and mature investors. The brokerage’s free mobile app is also a godsend. On the stock side, E*Trade includes all the usual options and a variety of ways to look at your investments, including a research platform that gives you quick access to consensus rankings and technical analysis.
There are also plenty of mutual fund options, as well as exchange-traded funds. Prudential investors can also open a IRA easily here, and those looking to have all their funds in one central place will find E*Trade offers savings and checking accounts, as well as associated online bill pay. It’s an all-around package of convenience that’s difficult to beat.
For stock investing only, E*Trade is on the pricier side, but heavy traders (more than 30 trades in a quarter) will see the fee drop to $4.95 per trade. Should you find you’re a whiz at investing (the site offers some tutorials and advice) and want more, E*Trade an automated robotic advisor, but you need to have $5,000 or more in your account.
Best for: New & novice investors
Fees: $4.95 per trade
Just because something is easy to use, doesn’t mean it’s not deep. Exhibit A is Fidelity, which should appeal to those just starting out, as well as more experienced investors who enjoy doing research. Fidelity is also something of a bargain; there’s no minimum opening balance, and trades are under $5. Most mutual funds, however, require an initial $2,500 investment. Still, with thousands of mutual funds and nearly 100 commission-free exchange-traded funds, there’s plenty of variety and investment options here even if you don’t like researching and picking individual stocks.
For those who do, Fidelity offers professional research reports from nearly 2 dozen firms, and the ETF research portal includes tools that will tell you what stocks comprise each fund. You can look for stocks on your own, based on up to 140 criteria, and create watch lists on the Web site that can also be viewed on mobile devices. In fact, Fidelity’s well-rounded app includes
the full range of trading options succinctly for buying and selling on your phone, as well as managing your accounts. You can check balances, read up on research, get push alerts, and tap into live prices.
Extra dividend: Investing for a good cause
For many people, investing isn’t just about making money, it’s about meaning. Indeed, there’s a growing group of investors who want to put their money where their mouth is by supporting companies that align with their values on issues like sustainability, income equality, and renewable energy. It’s a noble idea, but investigating and vetting every single company you’re interested in can be a vexing task. Fortunately, there are several specialized indexes and trading firms catering to so-called “impact investors.”
One of the more attractive upstarts in this area is Swell Investing. Swell doesn’t charge for trades. Instead, it levies an annual management fee based on a percentage of your total investment, which works out to be $7.50 per $1,000. There’s also a minimum investment of $50, but you don’t have to have thousands to own shares even in the more expensive companies. Swell aggregates shares so that investors have a direct, fractional ownership in the companies, according to Arianna Savant, who heads up product management at Swell.
What you get for the annual management fee is regular vetting of all the companies. There’s an Impactful 400 group you can participate in, or smaller more focused portfolios ranging from green tech to zero waste companies. Savant says Swell re-balances the offerings twice a year, examining how the companies align with the UN’s sustainable goals, how the company conducts itself, and whether there are any new controversies. You can even check on them yourself because Swell gives you an exact breakdown of each and every company (plus basic information) in the all impactful portfolios. If you’re looking to join, you can do so online or use the company’s iOS app, which launches later this month.