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Online trading is now a must for all investors
Apart from the flexibility, you get a lot of data that your broker doesn't provide

By Peter Foss

While I do not plan to talk about investing and financial planning here but if you are still trading through a broker you need to switch to a online trading for one simple reason:  your broker never has the patience and the time to give you all the information that you need to make a judgment about what stocks to invest in, when, and if you should get out.  (Related:  Personal finance for empty nesters)

What's wrong with your broker?
  • She or he is just too busy and even though he charges more for a trade, there is no way she or he can really dedicate all the time to give you the advice that you need.  
  • More often than not your broker is not around when you need to get in or out of a stock fast.  By the way, a broker can only talk to one person at a time.
  • While a broker has access to all the data that you need to look at, he will never share that with you for two reasons (1) doesn't have the time (2) you will probably fire your broker once you know that you could make better decisions yourself if you had the data.

How does online trading help you?

  • It is inexpensive and actually a greater value for your money.
  • You get access to data that you don't get otherwise (yes, you can get some data from a financial website like MoneyCentral, Wall Street Journal, CNBC, Bloomberg, etc. but it is old and incomplete).  (Related: Online shopping safety)
  • No matter where you are and what time it is you can access your account as long as you have access to the Internet (and now several online trading firms provide voice activated telephone access so that you can trade by speaking into a phone without the help of an operator).

How to pick an online trading brokerage firm?

  • Unless you plan on becoming a day trader, do not just look at the commission for a trade.  Sometimes for a dollar or two you will see significant drop in customer service.
  • Make sure that you sign up for Level II quotes and real time streaming news.  If you are not a heavy user, it might cost you about $10 a month but it is worth it.  When money is at stake, every piece of data counts.  So when you do decide to make a trade, you will have all the information you need on one screen and you can execute a trade when you want it.
  • Stick to one of the reputed firms (e.g. Ameritrade Apex, TD Waterhouse, Scot Trade, Brown Co, Fidelity, Harris Direct, etc.)

Recommended links:  Tips on guaranteed retirement income       Americans need retirement help    Teach kids about money

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