How To Buy Stocks Online For Beginners

How To Buy Stocks Online

It is easy to learn how to buy stocks online and I will show you how

WHY I USE E*TRADE AS MY ONLINE DISCOUNT BROKER


I have stock accounts at 3 different brokers (Merrill Lynch, E*Trade, and TD Ameritrade) and I must say that my favorite by far is E*Trade. Why do I have three different accounts? My Merrill Lynch account was set up for me in the 80′s by my father, my E*Trade account was set up as my first online account about 10 years ago, and I set up my own account at TD Ameritrade last year just to try them out after reading the great reviews they got. But in the end, E*Trade is still my favorite.

At the time I put my first dollars in E*Trade, they were one of the pioneers of online brokers and I felt they probably knew what they were doing more than anyone else. The online investing world was relatively new and I wanted to go with one of the leaders. They still are a leader today and I have never regretted it.

Price

I get all my stock trades for $9.99 and while I can get cheaper trades elsewhere, it is just not worth it to me to change because I don’t trade too often. Their price has always been $9.99 as long as I can remember and I get good value for that because I LOVE their website and how easy it is to navigate.

Website Usability

When you are choosing between E*Trade and other online brokers, you will find that one of the biggest differences between all of them is their platform website. For instance, I absolutely hate my Ameriprise account because their website is NOT user friendly. I can never figure out how to get from one place to another and I don’t like the way they display things. It’s like Ameriprise hasn’t thought about how best to present the account information and they have never changed anything to make it better.

E*Trade on the other hand, is a dream to navigate and it takes very little time to figure out where everything is. When you first log on, it will have your account(s) displayed right in front of you and all you have to do is click on them to take you to a screen that will show you every stock in your portfolio. You will immediately see how much each of your stocks went up or down for the day along with some other basic information. Everything about their website is simple and “user friendly” which is just the way it should be.

Account Safety

One thing I REALLY like about E*Trade is the feeling of security I get knowing that it is virtually impossible for someone to log in to my account. With every account you get an optional FREE digital security ID (see picture below) and you use it to access your account. The number on the ID changes every 60 seconds and you have to add that number on to your password to get into your account. You also get optional SmartAlerts that you set up to automatically inform you of any account activity. Bottom line: I know my online account is super safe because no normal person will be able to hack into my account without some super hacking ability.

 

Real Offices In Many Cities

Another thing I like about E*Trade is that they are big enough (publicly traded on Nasdaq – symbol ETFC) to have real offices in many major cities. Unlike some of the discount brokers that only have websites, they have a brick and mortar office in my city and I went there a couple of times when I wanted to add money to my account. I was able to hand a check directly to a broker and talk to him as well.

You can of course add money to your account by mail, wire, or electronic transfer but I like the fact that I have somewhere to go if I have any real problem or complaints. I have also dealt with them on the phone from time to time regarding account issues and always found their customer service to be great. They even have online customer service chat so you always know someone is there 24/7.

Research, Investing, and Trading Tools

Once you open an account you will have access to a full array of research tools that rival that of any online broker. I don’t personally use them too often but you probably will find all you need. Every stock you look up will have a section for analyst research, fundamentals, earnings (complete with graphs) and a section listing insider activity.

With E*Trade you also get a section that has about 25 videos covering different online investment topics. There are also periodic live web seminars that you have to sign up for that do NOT cost anything extra.

If you think you will want to be buying stocks on any of your mobile devices there are apps for the iPad, iPhone, Android, and Blackberry that allow you to trade on the go.

Bottom Line

E*Trade is one of the original online discount brokers that started the whole website stock trading revolution. In my opinion they have the most solid website experience and that is extremely important to me as I do log on to my account just about every day to see how my stocks fared. I feel confident having my money with them because of the responsive customer service I have always gotten and their price is right in line with most everyone else. Right now E*Trade is offering free trades for the first 60 days if you are a new customer plus up to $600 dollars if you put in qualifying amounts so it is a good time to give them a try!

What Kind Of Stocks Should You Buy When The Markets Are At A High?



Starting the last half of September and lasting for about a month, the Dow was on a steady slide that had lots of investors very worried. Was this the beginning of the often predicted big correction or even worse, bear market? Then just about as quickly as it started, the charts reversed course and shot back up to set new record highs.

So here we are again, the markets at or near all time highs and me wondering whether to buy more stocks now or wait for another pull back? At times like these, if I do buy stocks then I normally look for either of two things in a stock:

1) a dividend or

2) a stock that is not near its 52 week high

I will Always Like Dividends

Like many stock investors, I prefer the stocks I buy to pay a dividend. This is especially so when the market is on fire and I fear that it may head down at some time in the near future. Having a dividend means that while my stock(s) may lose value, at least they will be paying me something while I wait for them to rebound.

Dividends are especially popular with older investors who often need the monthly or quarterly payments to supplement their income. But a stock that pays a decent dividend is nice for any age investor, especially with interest rates being so low. Stocks that issue dividends are often established companies that don’t need the excess money for R&D or accelerated expansion. That dividend makes me feel safer when I buy a stock at the market highs.

Stocks That Are Beaten Down

My feeling is that if the stock market tanks, stocks that are flirting with their 52 week highs (or all time highs) probably have further to fall than those that are not near their highs. Many stocks right now have a lot of froth from enthusiasm built into their prices and a market reversal can pop those balloons very quickly. Stocks that have run up means that most everyone who owns them is sitting on a profit and that can lead to a stampede out the door towards the “sell” window.

On the other hand, identifying companies that have beaten down stock prices and show decent prospects for a turnaround might be safer plays if you fear the market might head back down. In those cases, the stocks of those companies have no excess enthusiasm in them and many of their owners will not have profits to protect. A market reversal will often affect beaten down stocks less severely than stocks that are at their highs.

These are two of the things I gravitate towards when I am searching for stocks to buy in time like these. I have no idea whether the market will continue up, stay level for awhile, or head right back down. But erring on the side of caution seems like a good idea to me when looking for my next stock pick candidates. 

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