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!

JUST ONE MONTH LEFT UNTIL THE ALIBABA IPO



For the last couple of months, the Chinese company Alibaba has been in the news a lot. I really mean A LOT! I think this initial public offering will be as big or bigger than the Facebook IPO in terms of media coverage, especially because foreign investors from around the world will be looking to buy stock on opening day.

Right now, what is known is that Alibaba will trade under the ticker symbol “BABA” and that they will trade on the New York Stock Exchange. What isn’t known is the exact date of the IPO or price of the stock when it opens. However, very strong indications are that the Alibaba initial public offering will take place the first week of September.

You Can’t Buy BABA Stock Before Everyone Else

The most asked question for any high profile IPO is how to get in early, before it starts trading to the masses that first day. If you are asking that question about Alibaba stock, it is safe to say that it is impossible for you to buy the stock early. That is because such privileges are only granted to company insiders, very high dollar clients of the underwriters, major brokerage houses, investment banks, and other players in the industry who have influence. I assume you, the reader, would not fall into any of those categories and that is why normal investors cannot get in early and buy before the initial trade date.

I Might Be Buying This IPO

I usually pass on all initial public offerings because the price of the stock often gets inflated too fast on investor irrational optimism. I try to buy stocks that have real value and hyped up IPO’s aren’t where I want to invest my money. But Alibaba is a proven company with a massive influence in China and I have little fear that the company will be around for many years as they try to expand. Unlike Facebook, Twitter, and all the other crazily valued Internet stocks, I feel Alibaba has a track record that shows it is serious about expanding, making money, and providing sellers an outlet for e-commerce.

I still have a month to think about whether I will buy BABA on opening day but I believe worldwide demand for the stock will be high and that will help drive the stock higher than the price it opens at. That is the key for me: the fact that investors from around the world will have heard about Alibaba and I believe demand for the stock from foreign investors will be strong. For that reason, I am more interested in buying BABA on the first day of trading than I have been for any other recent IPO.

Disclaimer: This is only my opinion and I may or may not buy the stock. BABA may go up or down on opening day, no one can know that for sure. Please consult a professional money manager or your stock broker before you take my advice and buy the stock!

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