Chroma Investing

Value Investing for beginning & small time investors and the value investing strategies of Graham & Klarman

Zecco vs. ChoiceTrade – Which is better?

As I narrowed my choice for the Small Investor Portfolio‘s broker, I decided I would set up an account at both Zecco and Choice Trade. One would be for the Small Investor’s Portfolio and the other for the 80-20 portfolio. I have my impressions of setting up accounts at both companies. Choice Trade- The first […]

Best Online Broker for Penny Stocks and the Small Value Investor

This is really the third in the series of Investing 101, the second of which discussed setting up a Small Investor Portfolio. But the title would have been too long if I left all that in. As value investors we are not just interested in value of our stocks but the process in which we […]

Beware of Brokerage Costs

The more money you spend earning your money, the less you keep. This includes premium services, taxes, transaction costs, brokerage fees. Anything that keeps your dollars from compounding in the future. In general this concept is pretty easy to grasp but in particular small money and beginning investors need to know that there is a difference between paying $10/trade and $5/trade.

Wells Fargo Online Brokerage – not good for small time investors

Because I happen to have an account with a large balance, I was invited to get Wells Fargo’s online brokerage with the lure of 100 free trades. Sounds great right. Here’s the catch. You have to have a minimum deposit of $25,000. And they charge an IRA fee. And they charged a penny stock penalty. I learned much of the downside later. What deterred me was ultimately their incredibly poor customer service and the extreme difficulty of establishing the account.

WB Trading More Cheap Online brokerage with fees

MB Trading is another brokerage company with which I have no experience. I picked up their name from the same Motley Fool discussion thread as Zecco. Let’s see if this sounds familiar. $4.95 per trade for up to 10,000 shares. $30/ year for IRA fees. What is that these companies have with separating you from your retirement money.

Zecco Cheap online brokerage with IRA Fees

I have not used Zecco. I heard about them on the Motley Fool forums. I don’t have any first hand experience, which will be the case moving forward. If you have $25,000 to open an account you can get 10 free trades/ month. But that is beyond our threshold for small time investors. For small time investors it is $4.50/trade. Cheaper than Tradeking.

Think or Swim – Good Prices for Penny Stock brokerage

Think or Swim is the online brokerage company I currently use for a Roth IRA i have, that I mostly trade Penny stocks in. So far they are the cheapest I can find. They have a dual fee structure that is well suited to investing in penny stocks, but doesn’t sacrifice alot on non penny stocks. You can pay $.015/share with a $5 minimum which works for larger priced stocks that you cannot afford a large purchase anyway. Or, you can pay a flat rate of $9.95 /trade for up to 5000 shares.

Tradeking cheap all around online broker

I will start with Tradeking because it was my first brokerage company. Why? $4.95 flat trading for one. Charles Schwab, the two buck chuck of the online brokerage companies is $12.95 for accounts with less than a million dollars. No kidding. The kind of discount brokers charges $12.95 for you small timers. I haven’t checked on the price he charges for big clients.

Best Online Brokers for Small Time Investors

Over the next few days I am going to highlight what I consider the best online brokers for the beginning investor or for someone who doesn’t have a lot to invest. I make this distinction for several reasons.

First, that is the focus of this blog, is small time or beginning investors.

Second, the needs of someone with out a $100,000 to invest are very different than someone who is bathing in assets.

Third, brokers treat people with more money differently than the rest of us. Red headed step child is the phrase that comes to mind.

Fourth, Online brokers are cheaper, so I have excluded them. As we have learned in the last year. Most investment advice is worth the paper you wipe it with. Brokers are salesman not analysts, which is an even better reason not to get investment advice from them.

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