Top 6 Best Online Investment Companies (& 1 to Avoid) | 2018 Ranking
It requires large amounts of money to profit off of these small changes. Pros Helpful platform for beginners Powerful platform for pros. Its platform boasts a library of educational videos, articles, and webinars for each type of investor. Best Platform for Cheap Trading. It prioritizes automation of its services to make smarter and more efficient choices — scheduling deposits, investing excess cash, and providing a holistic look at spending across all accounts. The Investment Checkup tool allows you to analyze your portfolio and can identify quick improvements that can save — or earn — you money. This provides transparency into any hidden fees you may be incurring because of a mutual fund or retirement account.
How We Found The Best Online Stock Trading Sites
Not paying attention to investment expenses is like revving your car engine while filling it with gas. That's why we spent a lot of time balancing price with what each site offered. The number of commission-free ETFs a broker offers also come into play.
Overall commission costs can also be affected by new customer promotions. Brokers may give you a chunk of free trades, based on your deposit amount. If your deposit can get you a substantial number of free trades, that can write off otherwise higher per-commission costs. Depending on your strategy, increased fees might just be the cost of doing business, but we aimed to mitigate these costs in our top picks.
Like any financial institution, an investment brokerage worth its weight has a strong reputation. Our five favorites consistently rank top in both sites' yearly report, which marks brokerages on technology, usability, and cost. In addition to attractive pricing, Ally offers a quality platform that gives you access to the entire universe of stocks and ETFs.
Where some discount brokers focus on only one kind of trader for example, options traders or high-net-worth investors , Ally Invest provides an excellent experience for investors of all kinds. A focus on discounted costs can sometimes be a red flag for quality, but Ally Invest truly delivers with sophisticated calculators, profit-loss estimators, and more. Ally Invest also offers a robust research library that incorporates visual slides and interactive media into its market data.
Much of the interface, low prices, and offerings have remained the same, though some discounts and promotions are no longer available. New investors need two things from their online stock trading platform: Its platform boasts a library of educational videos, articles, and webinars for each type of investor. You can also take advantage of one-on-one assistance: Branch appointments are free to book, and online chat tools and hour hotline are there to guide you from anywhere in the world. TD Ameritrade offers two best-in-class platforms, designed for two different types of investors.
Both platforms are free to use for any investor with a TD Ameritrade account. The web-based Trade Architect, though often in the shadow of thinkorswim, is streamlined and easy to use. It will appeal to beginning investors, or anyone who prefers a simplified, educational interface.
Its tab-based navigation lets users flip between trading tools and account overview, plus charts, stock screeners, heat maps, and more. Since the company acquired Scottrade, our favorite platform for beginners, in , we predict it will continue getting better at serving junior traders.
Thinkorswim, on the other hand, is a powerhouse designed for the advanced. This desktop application regularly racks up awards for its superior tools and features — research reports, real-time data, charts, technical studies. Things any other broker would charge a premium for. Its Strategy Roller feature lets investors create custom covered calls and then roll those positions from expiration to expiration.
TD Ameritrade has been a powerful player in the online stock trading ecosystem for years. The flipside to such robust platforms: TD Ameritrade remains one of the more expensive options out there, even with more than commission-free ETFs. Though its pricing structure is more expensive than some of the other discount brokers, there are many traders who think its best-in-class trading platforms. If you already have a firm handle on your investment strategy and want to maximize your profits, OptionsHouse is excellent.
What it lacks in some of the investor education features that competitors like TD Ameritrade can claim, it makes up with its low-cost, streamlined trading platform.
Along with competitive pricing, OptionsHouse has one of the most accessible platforms. Clean design and user-friendly tools help make heaps of information easier to digest. Trigger Alerts lets users set up their accounts to automatically purchase an order based on a particular scenario.
For example, you can set an alert to buy any number of shares of one stock if its direct competitor falls by a certain percentage. Tools like tradeLAB help dissect options spreads, with green smiley faces for the statistical probability of making a profit, and red frowns for a loss.
Whether you prefer to trade via desktop, tablet, or mobile, its customizable interface seamlessly transitions between all three — though, admittedly, customers seem to either love or hate the app. You can sort stocks by size, performance, and even criteria like sales growth or profit growth. Want to sort ETFs by the sectors they focus on, or their expenses?
When it comes to research, Fidelity is in a league of its own. The intellectually curious can dive into research from more than 20 providers, including Recognia, Ned Davis, and McLean Capital Management.
They cover how to apply principles to your own Fidelity investments. Charting with Recognia requires a significant trades per year to use, and its Active Trader Pro requires 36 trades per year.
Warren Buffett is the best example to hit this point home. Conversely, hedge funds stack management fees on top of trading fees to pay for the time and knowledge actual strategists are putting into your investments.
Index funds also tend to outperform mutual funds in the long term, making them an attractive part of retirement accounts. An ETF, or exchange traded fund, is an index fund that trades like a stock. An option is a more complex type of investment, one that carries the potential for more risk. Options are contracts that give you the right to buy or sell at a certain price on a set date.
Options are versatile and allow savvy investors to speculate on future performance or hedge against losses. These are complicated investments not suited for those just starting off.
Bonds are another low-risk investment type. Bonds are issued by governments or companies to raise money for various project. So by investing in a bond you in essence loan the organization money. It requires large amounts of money to profit off of these small changes. Futures are like options in that you are speculating on the future performance of a stock or commodity. But trading in futures means you must buy or sell the asset when it hits the predetermined price or the expiration date arrives.
All these investment options can be overwhelming, making it difficult to find a place to start. No investment is percent safe. Markets rise and markets fall, but there are ways to insulate your portfolio from excess risk.
By investing in a wide range of stocks and bonds, you spread your money around and can better absorb the loss if one of your positions goes south. In the right situation, it can pay off handsomely.
Putting a stop-loss on your positions so they sell when they reach a certain price can be a good way to hedge against big losses. When you think about stock trading, you might picture a bunch of frenzied traders at the stock market.
But most casual investors benefit from buy and hold strategies. This means you find the securities you want to invest in, buy them and then let them sit. Still, if you feel intimidated by the vastness of the stock market, you can make use of robo-advisors to make the decisions for you.
Robo-advisors are relatively new tools that make investing decisions based on algorithms that consider your financial situation. In the past few years, many of the larger brokers like TD Ameritrade, Fidelity and Merrill Edge have begun offering their own robo-advisors. Enrolling in a robo-advisor requires you to fill out a form with information about your income, risk tolerance and investment goals. Robo-advisors typically have an initial deposit requirement, usually a couple thousand dollars, and charge a percentage of the money you invest.
Ultimately it comes down to your tolerance for risk and the amount of time you want to dedicate to it. Each of the stock brokers we reviewed offers tools and resources to help you perfect your own investment strategy and reach your financial goals. Platform Ease of Use. Best Online Stock Brokerages: This is our 10th year reviewing stock trading sites. For this update we spent 80 hours testing the 10 best online broker platforms.