Best Online Stock Brokers of 2008: Finding a Right Stock Broker for You

Buying stocks is one of the most publicized activities in today’s business world. Online stock brokers allow you to bridge the gap between Wall Street and Main Street, so you can trade stocks in the blink of an eye with the click of a button.

I’ve already answered “how to buy a stock” questions, so let’s explore your options when it comes to online brokers. There are many factors that should guide your decision, these are what I think are the main factors in deciding which broker is right for you:

1. Customer satisfaction
   • This is probably the most important aspect of any online broker in my opinion. How do people feel about the service they receive? This includes a sense of security that comes with the largest brokers with hundreds of thousands of clients and local branches that you can visit for support. Does your broker assign an individual broker to each account or does he do it alone? In addition to support features, people will generally report on how fast transactions are going, which can be important in getting the best price on your trades.
2. Commission rates
   • For me, this is probably even more important than satisfaction, as I have less money at stake than the average investor. In short, brokers charge commissions on every trade you take to manage transaction costs … how expensive are these? These costs can range from $ 1 to $ 20 per trade, so this can be a huge factor … or a minor factor … all depending on how much money you have in your account.
3. Minimum deposit
   • Again, for some this is not a factor, but it is definitely something to consider if you are an average investor. Do you want that discount broker who has a minimum deposit of only $ 500 … or are you going to look for the full service kings that require more than $ 10,000 minimum in their account to get started?
4. Research / Features
   • Research is very important to all runners. Some of these overnight brokers don’t offer you anything in the way of research. Most of the more established types will give you free reports from Standard & Poor’s, Goldman Sachs, Reuters, and other places that can help you make informed trading. In addition to research, features like live stock tickers, after-market trading, and even technical chart analysis should be important aspects of your broker. If you have the tools to be successful, you are much more likely to make money.
5. The capture”
   • What’s the trick? You must do your homework before choosing a broker. One of the reasons I like Scottrade is that they don’t seem to have any, as all trades are only $ 7 forever. Other services have introductory offers that expire after the first month. For example, E-Trade has a 100 trades free deal, but when you read it … it only lasts for the first 30 days. Other brokers will increase commissions periodically or charge quarterly commissions to the account for holding your cash. Finding all the hidden terms is important and can make or break your financing.

Now that we know what we’re looking for in a broker, it’s time to see what brokers there are for you to use and how they stack into these five categories that I’ve outlined for you to apply when deciding where to keep your cash. Introducing Net Fool’s 2008 Value Rankings for Online Stockbrokers

1. E-commerce
2. Scottrade
3. TradeKing
4. Charles schwab
5. Interactive corridors
6. TD Ameritrade
7. Tradestation Values
8. Xpress Options
9. Muriel seibert
10. Fidelity
11. Zecco
12. Sharebuilder

These rankings are based on my own experience, shared reviews from sources like Barron’s, Standard & Poor’s, Forbes, Kiplinger, and MSN Money. Note that the rankings are weighted towards the lowest commission / lowest deposit “value” brokers, although all satisfaction and features are accurately represented.

Finding the right broker can be a real decision, and all of the “top 12” options are very good services. While I think it would be best to have an E-Trade or Scottrade account, having an account with ShareBuilder or Zecco would not be your worst option. If you have a lot of money to invest, you need to focus more on features and satisfaction, which is why a broker like Schwab, Fidelity, or Muriel Siebert will adapt to your needs if commissions really aren’t a factor for you.

I hope everyone found this guide useful. Online discount brokers are a relatively new phenomenon and have been improving day by day … making it easier, cheaper and faster than ever to trade and make money in the stock market.