How To Buy Stocks Online For Beginners

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!

I started buying stocks in my 20′s and many years later, it has become a hobby that is just part of my life. No matter what age I live to, I hope that managing my investments is something I can do because:

1) it is interesting to me and

2) it is profitable as well

I suppose being profitable makes it interesting because anything is more fun when you succeed at it than when you fail.

Buying Stocks With Money You Don’t Need

The key to getting started investing in the stock market is to do it with money you don’t need. I know that in today’s fast paced world where so many people are in debt, that might be hard or even impossible.

But when I was young I scraped together some savings and bought stock with it. The goal was to grow that initial investment, add to it throughout the years, and never withdraw any of it along the way. Hopefully with that strategy, when I reached retirement age, I would/will have enough money in my investments that it would/will make a meaningful addition to the paltry sum of Social Security that I might or might not get. (Who knows? The SS system is in big trouble and may be bankrupt before I and many of you retire and are eligible to get anything back!)

I know there are major purchases you probably will want to make along the way such as cars and houses so never deducting money from your online broker account may not be realistic for most of you. Nevertheless, if you do your best to keep that account in tact, keep adding to it from savings, and make good long term stock picks along the way, you should both have fun and make money investing in stocks.

Stock Market Investing Is A Marathon

I know it is more exciting to be in the action, constantly buying and/or selling stocks but that is NOT what is best for your portfolio. You need to realize that investing is something you should be doing for the rest of your life. Managing your money is a skill everyone should learn and be involved with because, well, it is your money and you worked hard for it!

Day trading and frequent buying and selling of stocks is what the media and online brokers want you to do. CNBC and Internet investment sites want you to be an active trader because that is where the money is generated (the money for them!) They make it sound like you should be in a stock one week and out the next, on to the next one. BUT THAT IS WRONG! That is NOT the way to make money investing in stocks over a lifetime.

The real way to do it is to consistently pick good companies, buy their stock, and hold that stock for longer periods of time. If you pick solid companies that have great long term businesses you can do that. Hold through the good times and the bad and you will undoubtedly make good money (as the history of the stock market has shown).

My Lifetime Hobby Has Been Great For My Pocketbook

I have two hobbies and both of them are something I can do until an advanced age (cross my fingers): golf and investing. Watching the stock market and keeping up with current financial news can keep your mind sharp into advanced years, as my 88 year old father can attest to. I hope if I somehow live to 88 that I will also still be able to manage my money and have a bit of fun doing it.

If I hadn’t started investing in my 20′s and learned how the market works, I might not have very much money to manage. That is why it is so important for you to do everything you can to save some money and buy your first stock. You have to start somewhere and buying that first stock is an important milestone!