how to buy stocks online

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!

At no time should you feel like you should have or need to have 100% of your money invested in stocks. This is especially true at times when you have doubts about anything related to the stock market or the economy. Bottom line: if having too much of your cash in stocks is robbing you of precious sleep, selling some of your shares might be the right thing to do. No investment should make you uncomfortable – it just isn’t worth it. 

Right now the Dow, Nasdaq, and other major indices are near all-time highs. According to a Google search it has been 27 months since the last market correction of 10% or more and that makes a lot of people, me included, very nervous.

With this multi-year lack of a correction comes the predictable debate: is the market overvalued and are stocks setting themselves up for an eventual big correction (20% or more). If you regularly read financial news articles like I do you will be able to find an ample number of pundits on both sides of the argument. Some think it is a no brainer the stock market will go down 10% to 20% and that it will happen sometime in 2014. There are a lot of very cautious people out there. And yet, other “experts” believe that many stocks are fairly valued and they feel the market has more upward potential. No need to worry yet, they say.

Investing – Do What Feels Right To You

There is no doubt that it is darned near impossible to make money anywhere but the stock market. Near zero interest rates guarantee that any safe investment vehicle will return next to nothing and that has certainly helped propel stocks up over the last 5 years. But if you feel uneasy having everything in stocks, it is okay to have money on the sidelines (earning nothing) if that makes you feel better. **Always remember, it is your money and ultimately you should be the one dictating how it is invested – not some financial planner or stock market guru you watch on television.

It is honestly hard to know what to do right now as the market flirts with new highs almost monthly. Everyone hates to buy at the top for fear stocks will drop and yet missing out on a good run hurts as well. There just isn’t a right answer and I believe that just doing nothing and waiting if you feel nervous is justified. Additionally, if you do wait and have money set aside that is truly safe, you will be able to take advantage of falling stock prices should the market indeed go down. That is a good thing and you might be glad you waited at some point in the future.