What is the best online brokerage site for a young investor with about $1000?

Question

I have decided to start investing in the stock market, and have about $1000 that I can use for investing. I am up to date with the state of our economy and know a good amount about the stock market. Does anyone know what would be a good online service to use? I have heard that Scottrade is the cheapest, but does it fit the needs of someone like me? I plan on actively trading stocks, and using it a bit for short-term gains, not just long term, so I will be trading quite often. Will the commission fees catch up to me? Any help and advice would be great. Thanks.

Answer 1

With $1000 the commissions will definitely add up very quickly. Either that or you will have to sacrifice diversification or take too much risk. I usually recommend $5k - 10k to get started in stocks. I suggest you buy a no load mutual fund / ETF with your $1000 instead.

Answer 2

I use TradeKing.com, with $4.95 commissions, but there is also the delta between the the price you pay vs current price. You incurr these on the way into a trade and the way out, let alone if you wanted to add to a position or sell 1/2 if you get to a 50% profit. Plus there's capital gains tax.... $1000 can get chewed up very quickly with these costs even if you're stocks appreciate in price. Having said that $1000 is enough to invest with, but you will have to buy 1 good stock after a sizeable dip (ie AAPL,VMW) to add some protection to your timing. You'll have to make sure the sector is secure, and the market is secure. While that's growing and your future investment pool builds, I would open an account in optionsxpress and select $10K in their fake trading account and start honing your skills. Once you're confident there, I would also start learning about options, starting with just calls. While they can be riskier, you should only use them when you're nearly guaranteed of appreciation. Then, once your track record with the fake acount starts growing, you are ready to employ that method with your real money.

Answer 3

Scottrade is a good discount broker. But active trading with only $1000 is very risky. No matter how good you are, you will loose on some trades. To keep the trading costs within reason you will need to limit yourself to one, maybe two stocks. Which means that with current market volatility you could easily see a significant reduction in your stake very quickly. That would make trading costs even more of a factor and reduce your ability to catch up.

Answer 4

avoid the online with a small amount try DRIP funds. there are some good company that sell direct or through banks some symbols of stock company's are ( D< BOBE< GE

Answer 5

Hey mate are you anywhere near Sydney? Cause I have similar questions about stocks, and am playing Kiyosaki's cashflow game soon with some people who know about them. Maybe we can both get a bit of insight... give me a buzz if you're interested.

Answer 6

I like Scottrade.

Transaction fees for a market or limit stock transaction are only $7.

It also has many mutual funds with no loads and no transaction fees.

Answer 7

Vanguard may be the cheapest. For small investments, consider Certificates of Deposit. They are close in interest paid with T bills and T bonds. Look at banks in your area first. Most banks will be close in interest offered.

Answer 8

Zecco.

Answer 9

try www.etfnavigator.com.