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Question:


I'm new to the whole investing thing. Would you suggest opening a Scottrade or E*Trade account or going with the more tried-and-true Charles Schwab, Vanguard or Fidelity?
-JimmyQ


Answer:


The second group may be more tried, but I don't think they're any truer. All five of these companies are much of a muchness, as far as executing trades is concerned. Scottrade and Fidelity offer the lowest commissions, Schwab's are the highest and Vanguard's seem to be the most complicated, changing with the number of trades executed within a year and the balance in an investor's account. Unless you want to trade only Vanguard ETFs, there doesn't seem to be a lot to recommend its brokerage service.

All of the brokers offer research tools and access to trading by touch-tone phone - at higher commission rates - as well as access to human brokers - at much higher rates. That might help you if you're just starting out, but if you really don't know what you're doing and have a lot of money to invest, you might be better off going with a full-service broker that can offer stock-picking and other advice. If you'd rather go it alone while still acknowledging your ignorance or perhaps your limited means, then your best bet may be to open an account at any of these brokerages and invest a fixed dollar amount each month or quarter in mutual funds tracking broadly diversified stock and bond indexes.

-Conrad de Aenlle



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