There are a few different places where to buy stocks. You must buy your stocks and other securities through a registered broker who works for a registered brokerage house. Stock trading is really easy. Making money with stock trading is not.
While stock trading is the main focus of this site, know that you dont have to limit yourself to simply stocks. You can also buy such things as options, ETFs and currencies. If this sounds good to you, you may want to check out the other markets.
But, for now, back to what we’re all here for, stock trading.
I hope by the end of this you understand the difference between a full service broker and an online discount broker. Those are the two places where to buy stocks. I use a online discount broker, Scottrade. I use them because I prefer to do all the research myself. But if you are someone who isn’t familiar with which stocks to buy, you may want to opt for a…
Full Service Broker
The place where to buy stocks if you would rather trust your money with a professional is with a full service broker. They are the most costly of the two, with a fee based on the amount of stock you buy instead of a fixed fee. They will give you advice and talk with you on a one-on-one basis. Online discount brokers don’t offer this.
My grandma uses a full service broker. I often talk to her about technical analysis and choosing stocks since I am more of a hands-on guy. I like to know exactly when and why I’m buying a stock. I do it for the knowledge. I don’t mind losing a few hundred bucks, as long as I learn from my mistakes, which I usually do.
She is happy for me but prefers to trust her money to the professionals, like many Americans who prefer not to be bothered with all the work. Full service brokers generally focus on long-term gains, and diversifying your portfolio. They employ a whole department focused on research to find the best stocks for you and to monitor your current investment. Where to buy stocks would be a full service broker if you are like my grandma and feel safer dealing with a professional.
Online Discount Brokers
Another place where to buy stocks is from an online discount broker. Scottrade has a minimum opening account balance of $500. This is one of the reasons why I chose Scottrade. Soon, I may be changing over to another online discount broker that doesn’t charge as much. But, Price is not the only important thing for me. With Scottrade, you get the benefits of a larger company, with still the low trading price. Scottrade also has many offices around the country.
The lowest charging brokerage as far as I can tell, charges only 2.50 per trade. But, since I will be only doing between two to five trades per month, I might stick with the same broker.
The small minimum opening balance is a big seller for Scottrade. they also provide other benefits such as $0 account closing fee, and 444 branches nationwide, which are more offices than the other leading brokers.
This is a big difference from the not so well known online discount brokers, which many have only a few or no offices.
Now You Know The Difference
So, if your going to get a full service broker, good luck. I’m not familiar which one is the best. But, they do compete often with one another. So, try to find a good deal with the top players.
For me, I prefer an online discount broker and to do all the research myself. If your in the same boat, I look forward to teaching and hearing back from you as I continue to write this site, as this site is focused around technical analysis.