What Brokerage Should I Use (About to Graduate Finance major)

[TonySoprano24]

Ok so I know a little about finance from being a finance major but don't claim to know everything....I know enough to know that I don't want actively managed mutual funds and all that....I still have a lot to learn but here is my criteria and situation....please recommend an online broker for me

1) I will have a roth ira and contribute the max 5k every year in addition to my work 401k program
2) I will mainly probably use index etfs or MAYBE index mutual funds for my retirement plans
3) I want to trade individual stocks for my personal taxable account too as i grow older and learn more and more
4) I want to trade options easily on the site for myself since i enjoy that stuff (finance major)
5) I will not be day trading or anything...buy and hold for most part except for options for my "fun" account

Basically something that I can use for the 5 criteria i listed above

Can anyone tell me their opinion on index fund etfs vs index fund mutual funds...

anyways my goal is to retire around 60 maybe 50-55 depending on how things are

I plan on increasing my contributions by 5% every year to my retirement account(s) and plan to have around $2.5-$3 mil by 60 (less if i decide to retire earlier and give up more stuff)

 

[CuppaJoe]

Tony Soprano, I can't believe I get first crack at this. So what happened to the backyard system? Oh, yeah your DW found it. Still one step ahead of the feds?

 

[TonySoprano24]

sorry i should have mentioned this is going to be under my Russian prostitute's name

lol

 

[CuppaJoe]

Phew, that's a relief, she's a lot better looking than you. We'll give you a pass this time, but generally we like to see tasteful photos attached:

 

[Grep]

Without a doubt, Vanguard for mutual funds (their ETF's have about the lowest expenses too).

If you are just starting out, go with their funds and skip the stocks and etf's until you have more money to play with.

If you are dead set on trading individual stocks frequently or in smaller quantities, Vanguard is too expensive (up to $25 per trade) and you will want to find a cheaper broker. I can't advise you on that.

Good luck.

 

[TonySoprano24]

Thanks....also can you trade options on all these big well known brokers (vanguard, fidelity, scotttrade, td ameritrade, etc..)

or do you have to use a site specifically for options like option express or something?

thanks

 

[Grep]

Thanks....also can you trade options on all these big well known brokers (vanguard, fidelity, scotttrade, td ameritrade, etc..)

or do you have to use a site specifically for options like option express or something?

thanks

To my knowledge, all the big boys handle all of the above.

Again, I'd advise that you start with mutual funds, perhaps moving to ETF's (in cases where they are less expensive) when you can buy larger chunks of shares at a time.

Leave off consideration of the fancy stuff until after you prove successful at managing your emotions and your portfolio during a major crash or two.

Do a LOT of reading before doing anything more than trickling money into a diversified fund or two such as Vanguard's Total Stock Market fund and Total World ex-U.S. funds. Check out this wiki for some basics, including a list of good books:

http://www.bogleheads.org/wiki/index.php/Main_Page
http://www.bogleheads.org/wiki/index.php/Category:Books_and_Authors

The forum there is a valuable resource too.

 

[TonySoprano24]

yeah you're right...so would you guys recommend like index mutual funds then? or a different chunk of value, growth, small large etc...types of funds for starting out

anyways ill use some criteria to narrow it down further and come up with 10-12 funds that i can choose from vanguard seems like the top dog in funds from what you guys said and what i read online

friend of mine has his ira through there ill ask him what he thinks about that too

thanks again please do chime in if you have something more to say anything is welcome im a complete noob lol

 

[Grep]

There are two camps of index fund users, those who go with market capitalization and those who "slice and dice."

Market capitalization is the cheapest and most efficient in a theoretical sense, and it's the easiest - just buy Vanguard's Total Stock Market fund plus their All-World ex-US for foreign stocks and you are done. This is the way to start until you have a lot more money. You will want to keep the number of funds low to start with to meet the minimums and keep expenses down. Don't dismiss the costs of investing - they really add up.

Once you have more money to invest, you can "slice and dice" by buying chunks of various sectors - Large Value, Small Cap Value, etc. This is a more expensive way to go, but the value in "slice and dice" is the ability to rebalance by selling the funds that go up and buying the funds that go down. This is the opposite of what many people do, but you are supposed to buy low and sell high! Still, it takes discipline to sell stocks that seem like they will go up forever and buy what is beaten down until everyone hates it.

If you are just starting out, go with Vanguard's Total Stock Market fund and balance it out with the Total Bond Market fund in whatever proportion makes you happy. This is the simplest and cheapest way to invest. Add All-World Ex-US for foreign eventually. You can get fancier later and still keep these as core holdings.

 

[Tadpole]

Tony Soprano, I can give you a hint as you decide on a career path. Mobs are out and pirates are in. Just call yourself #24.

 

[wrigley]

Thanks....also can you trade options on all these big well known brokers (vanguard, fidelity, scotttrade, td ameritrade, etc..)

or do you have to use a site specifically for options like option express or something?

thanks

I have a SCOTTRADE account that allows me to do pretty much whatever I like. $7 trades. My friend swears by Charles Schwab, and I should probably listen to him more since he is an investment broker!

Mike

 

[LOL!]

WellsFargo is the broker you want to use. Here's why:
Bogleheads :: View topic - Wells Fargo PMA Brokerage Account

In a nutshell, everything is free including Vanguard mutual fund trades.

 

[Dawg52]

Phew, that's a relief, she's a lot better looking than you. We'll give you a pass this time, but generally we like to see tasteful photos attached:

Someone please use this honey as their avatar.

 

[dex]

I don't think you need just one today considering how easy it is to move money. I would suggest:
E*Trade - checking account, savings, company stock option plans and brokerage.
Vanguard - MM and mutual funds

 

[W2R]

Someone please use this honey as their avatar.

You think she is prettier than Mr. Ed, then? I just had to let Eva cool off for a while. Nah, I think I'll stick with Mr. Ed for now.

 

[Moemg]

Tony , If I were you I'd invest in redoing the bada bing and maybe financing Carmella in a restaurant venture . After all her lasagna is to die for .

 

[TonySoprano24]

hahah glad to see so many soprano fans here

i feel at home now lol

 

[Moemg]

On the serious side I'd use Vanguard for your funds and then a low cost brokerage for your stock trading .Vanguard charges too much for trades especially if you dabble in the pink sheet stocks which I've been known to do when the gambling urge hits me .

 

[tuixiu]

I think Grep had good advice... always keep it simple, but especially so when first starting out. Use Vanguard broad index funds for simple diversification, adding more layers as you need when your portfolio grows.

 

[TonySoprano24]

Yeah thanks guys looks like I'll be going with Vanguard for their low expenses

I might open up an account with some discount broker like Trade King, Zecco, or Scot trade for my "fun" account

BTW, does Vanguard do the same thing as Trowe price where if you dont have 3k to invest you can sign up for $50 a month automatically or something or do you have to have a lump sum?

 

[LOL!]

I am not aware that Vanguard lets you start with less than the initial minimum even if doing an automated investment program, but I could be wrong.

The Vanguard STAR fund has an initial minimum of $1000 and is often suggested as a starter fund at Vanguard.

For all things Vanguard, check out Vanguard - Mutual funds, IRAs, ETFs, 401(k) plans, and more and also Bogleheads Investing Advice and Info

 

[fireby40]

Listen to the majority here and go directly with the Vanguard funds. For your "fun" account I would go with TradeKing. $5, and the site is much better to use than the other cheapies. I have a Roth with TradeKing for just that purpose