Friday, July 25, 2014

Where to go for Self-Directed Investing

There is choice in this market.  These firms want your business.  The largest firms with the TV ads are not the best rated.  This choice basically depends upon your goals.  If you are looking to explore, you'd like their site to offer research tools.  If you know how to find out what you need to know, you can go for the best package of transaction-cost and services for you.  You can test drive their web sites because (I believe) all of them let you open an account before depositing any money.

Nerdwallet shows the $5.00/transaction brokers and rates them:
(None are fly-by-night.  It looks like TradeKing is the winner)

A nice set of capsule reviews (TradeKing wins again):

Good summary of features in a table but a bit out of date: used to be a great source of information but it's gone downhill.  I like Tom and David Gardner (founders) but the site has gone commercial in a big way.

You will be fine with the web interface from any of the firms in those lists.  I have never used TradeKing, but I would probably start there.   I think they all let you open an account with no deposit, so you can test drive the user interface and see if you find it usable.

I'm still with TD Ameritrade for two reasons:
1) Historical.  This is the successor firm to the first internet brokerage, the old  I still have my original account. 
2) They bought out the ThinkOrSwim brokerage and got the nice Java-based trading platform which they provide for free and are continuing to develop.  I've come to like it.  You do not need this, and it's much harder to learn than a web interface.

I need to move off of TD Ameritrade, at some point, for my more active trading.  Their data feed is thinned and bursty and intentionally low-bandwidth.  Their transaction routing is no longer optimal.  Datek was famous for, and I experienced it myself, the fact that they optimized your routing and often you would get a better price than you asked for. That never happens any more.  You won't find it elsewhere, either.  You have to expect exactly what you asked for.

Be insanely careful with your money, Okay?  If you do go into this, talk to me about how to protect yourself in the market.