I’m finally at a point in life where I have some savings I’d like to do something with and have been looking at the stock market. After seeing what happened when Mastercard went public (IPO price of $39 per share in may 06, currently selling at $160ish) and with the Visa IPO coming up soon I’m really getting interested. I’m thinking of using one of the online services and have been comparing mostly Etrade and Scottrade. Does anyone have any experiences or advice as to which way might be best to go? I’ll be starting fairly small, probably a couple thousand and see from there if that helps with what might work best.
I use Ameritrade. I really like them. I run 4 IRAs and a regular investment account through them.
Also, you may be young and silly so you don’t care about losing money, but your attitude should be, “I look forward to buying a diversified portfolio of stocks, or a low cost index fund that I will hold until retirement.”
Not, “I’m going to get rich off a Visa’s IPO.”
Try having a look at Vonage’s IPO.
You’re probably not going to be able to purchase Visa at the IPO price unless you already have an assload of money. But, that’s a silly strategy anyway. Just buy stocks and check them in 5 years and see how much more money you have than if you left it in savings.
And, take advantage of Roth IRAs.
This is reasonable advice, but there’s something to be said for occasionally swinging for the fences in the stock market if you are sufficiently risk tolerant (e.g. young, decent job, not betting the rent.) However, some good advice is “invest in stuff you know something about.”
Anyway, I use etrade. No problems with it.
Finally some smart advice! People are so quick to buy the biggest and best in whatever is hot. It’s my experience those people los ein the long haul. I agree completely with Trunk.
I use TD Ameritrade - I’ve been a customer since they were TD Waterhouse.
I worked for E*Trade for 8 years (the early years) before quitting to homeschool the Kiddo. I think they have a great product. I still use them.
I’ve used www.sharebuilder.com for quite some time- they’re a good service if you’re starting small and don’t want to pay high fees.
Check them out, and see if they’re for you.
Also, many companies you might be interested offer direct purchase plans (which may offer the bonus of automatically reinvesting your dividends). Scan for “Mellon investor”, "Computershare, www.adr.com (specializing in foreign companies) or Bank of New York to find out more about those.
I’m not looking to get rich of one IPO, that was just an example of something that sparked my interest in the stock market. My overall plan is pretty much what you describe.
Thanks for the advice all, I’ll keep researching and settle on something soon.
DO NOT USE ETRADE UNDER ANY CIRCUMSTANCES. They engage in deceptive business practices and their customer service is the worst I have ever encountered in my life (that’s not an exaggeration). They roped a lot of people in with attractive offers of low-cost trades, no fees, and good interest rates on cash balances. Then they took that all away and started adding ridiculous fees all over the place. I was more fortunate than some in that I watched my account like a hawk, saw what they were doing, and transferred all my holdings to Ameritrade. Some people who weren’t paying as much attention had their holdings sold by ETrade to pay the fees that E*Trade added after they signed up. They charged me a ridiculous fee to transfer my holdings out, but I was glad just to be done with them.
I use Ameritrade now, which merged with TD Waterhouse. So far they don’t seem as bad, and a live person will actually answer the phone when you call them.
Read this before you sign up with E*Trade:
Yeah, I had E*Trade like back in '99. I owned stock, and had a hundred bucks or so sitting around in the account.
Well, I didn’t check it for like 6 months, and I only had like $10 left. They were taking money out for some kind of maintenance fees.
I always assumed it was something standard that I screwed up, but after that. . .whether it was sour grapes or a legitimate complaint, I just said, “screw them”. Now, Ameritrade gets my money.
Contrary to the previous poster, I’ve had multiple accounts with Etrade for over 10 years and I’ve been happy with them.
On another subject: you need to learn how to analyze a stock before you buy it, primarily on 2 factors: 1) is it a good company? 2) is it selling for a good price?
The best method I’ve found, and the one I use in my portfolio, is taught by the NAIC, the National Association of Investment Clubs. While they are primarily focused on investment clubs, their analysis method works equally well for individuals. Also note that this is A NON-PROFIT organization primarily interested in education, not in parting you from your money.
I’ve been both a “club” member and an individual member of the NAIC for 12 years. You can learn about the NAIC at http://www.better-investing.org.
To find out about their stock analysis method, look for “Stock Selection Guide” or SSG on their website.
J.
I recommend the Vanguard Group. You can check them out at
http://www.vanguard.com
Firstly they have every investment service you could possibly want. Mutual funds, a brokerage service to buy individual stocks, IRAs, educational investment accounts, you name it. It’s easier to keep track of your investments when everything is in one place.
Second, their site is extremely user-friendly and all of their reports and investment advice columns are written in plain English.
Thirdly, their ethical record is spotless.
Fourthly, their fees and loads are the lowest in the industry. (In fact, for most of their services, there is no fee.)
Just a positive word about Scottrade. I have used them for several years and they are great and cheap ($7 a trade.) On the rare occasion where I did not understand something I was able to call and get an explanation immediately. Highly recommend.
Are ADRs considered a form of currency hedge? will the stock price fluctuate independently of share price? What about any dividends?