Online investing offers a convenient, inexpensive way for an experienced investor to manage his or her portfolio.
Services: Real-time quotes, research, investment information and tools, online trading, touch-tone trading, Web site account access, check-writing privileges, and margin loans.
Products: Full selection of traded securities and mutual funds.
Payment: The lowest trading fees available, typically as low as $8.00, but there are now options available for free online trading.
Benefits: The Internet allows you to research your investments with more ease and thoroughness than was previously possible. Plus, the electronic trading system provides an inexpensive alternative for making real-time trades with just the click of a mouse.
Disadvantages: No direct access to a licensed broker who can offer advice and make recommendations for your personal situation.
In her book, A Beginner’s Guide to Day Trading Online, Toni Turner offers the following suggestions for what to look for in an internet brokerage:
- A Web site that is accessible and easy to navigate without a lot of slow, cumbersome graphics.
- A well-organized trading screen with built-in safety guards to prevent data entry errors.
- Access to real time quotes–current stock prices displayed on the screen.
- A quick confirmation system.
- Current portfolio updates and account balances.
- Alternate ways of reaching a real broker.
- Low margin rates–be sure to shop around.
- A low–or no–minimum dollar amount to open an account.
- The ability to conduct buy or sell stops, which instructs the system to buy or sell a specific security automatically when it hits a predetermined price.