Choosing an online stock broker

If you want your stock investments to be profitable, you must use a brokerage service that aligns with your investment goals.

The company’s services should also align with your educational needs and learning style. Newbie investors need to select the best online broker. It is easy to be enticed by online brokers with no deposit bonus advertising their services online.

There are no guarantees to investment returns when it comes to investing in stocks. However, choosing the right online brokerage will go a long way to reducing the risks involved.

Below are the critical factors you ought to consider as you choose, review and rate an online stock broker:

Cost per trade

Cost per trade is an important factor when choosing online stock brokers. Because it is a number, it is easy to compare different companies. However, you should be careful not to focus on one cost, like stock trade cost, because brokers usually have different fees. As a result, ensure you thoroughly examine all costs. Look at online resources that compare broker fees to help you decide.

Minimum initial investment

All brokers have a minimum initial investment requirement. For some, it could be thousands of dollars. If you are new to investing with online brokers with little capital to invest, it may be irrelevant that a broker is the best in the industry if you cannot meet its minimum initial investment. In this regard, go for a reputable online broker that requires a minimum initial investment you can afford.

User-friendly website

A broker’s website is arguably one of the most important things you should consider. Choosing a broker that offers low commissions is great, but if their online platform is confusing, you have a problem. Therefore, if you are a new investor learning the trade, you should look for a company with a site that is easy to navigate and use. Moreover, the site should have clear instructions about what a user should do in every step. The broker’s website should also have a proper error-handling mechanism that ensures that users who make mistakes can correct them and keep moving forward.

Available investment options

Before you settle for a stockbroker, check the investment options they offer. A good broker should offer its clients the ability to invest in a wide range of assets. The assets to look out for include:

• Bonds
• Stocks
• Certificates of deposit
• Government treasury securities
• Mutual funds
• Real Estate investment trusts
• Exchange-Traded Funds (EFTs)

Even if you are planning to invest in a particular asset right now, you must consider the possibility of extending your portfolio in the future. For this reason, you should go for a stockbroker that can offer you all the possibilities.

Asset allocation advice

Asset allocation is usually a challenging investment function for many investors, particularly new investors. It is not easy to decide on an initial asset allocation and even more complicated to maintain that allocation. This requires you to perform occasional rebalancing, which could be complicated if you do it manually. It will help if you go for a broker that offers asset allocation advice and if the service attracts additional charges.