Is it smart to start off investing/trading with a broker?

Question

I will have about $10,000 to invest when I get out of the Marines. I know the majority should be invested, and I would like to use some to try trading on my own. How much should go where? And should I use a broker (and which one) to start with mutual funds, bonds, ect.?

Answer 1

"Full Service" brokers charge enormous fees compared to "Online" brokers, and to no advantage. Using Questrade (I"m in Canada) I can buy 500 shares at $40.00/share for $4.95. A full service broker, with typical fees of 1%, minimum $80.00, would charge me $200.00.

The best money to be made is in "Momentum Trading", (see Investopedia). It's tricky, and scary, but not impossibly difficult in a bull market, which may begin in early 2009, which gives you time to study.

98% of day traders lose most of thier money, don't waste your time.

Good luck to you, you'll be dealing with world class financial athletes.

Answer 2

Invest your money intelligently! Investing is risk but you need to prepare good knowledge to get start. Get wise and basic knowledge from Pit. Pit will give trading recommendations and help you step higher with investing tips. I tried and believed in Pit. Let's try!

http://pitguru.com

Answer 3

Trading is fun but I'd be much richer now if I'd just put my money into a good no-load mutual fund.  Vanguard is a really good company so check out their website.  Low fees are their forte.

If you want to trade, Schwab has excellent research and customer service.  Their fees are a little higher than some others but you get something for your money.  TD Waterhouse is cheaper but more likely to make mistakes handling your account (my experience at least).

You are wise to start investing now.

Answer 4

Never pay a broker unless you feel like you need to pay someone 5% of your money to tell you what to do with it.

If you have the time and inclination, instead open a discount brokerage account and then invest 2500. of your money in 4 different 5 star rated no load mutual funds for a few years. A brokerage like Fidelity does not charge you a load fee to invest in a Fidelity fund and there are many to pick from. I'm sure Vanguard and some of the other quality discount brokerages have similar offers available. All the discount brokerages have educational sections on their web sites so you can learn how to invest in any of the thousands of different financial products that they all sell.

Take these first years to read everything you can and watch as the market hopefully rebounds from it's current near bottom. When you feel like you have gotten to the point where you are ready to invest in other types of investments then you will hopefully have 15K or so to start making other more risky investments.  Start off with one blue chip stock fund, one small or mid cap stock fund, one good balanced stock & bond fund and then maybe a government bond fund or some similar combination of high quality 5 star mutual funds.

As for the type of account to open, read up on ROTH and regular IRA accounts as you might want to start now saving for your future retirement. Since you are probably under age 40 you might want to open one or both types of IRA now or just open a regular investment account. This decision would depend on when you anticipate needing your money back.

http://personal.fidelity.com/accounts/se...

https://personal.vanguard.com/us/home

http://www.tdameritrade.com/openaccount....

good luck and have fun