Trends in the computing industry and issues to consider before purchasing a new computer or upgrading your current system. Using investor sentiment to indentify tops and tradeking forex commission rates in the market. Market breadth and momentum indicators to gauge the market’s overall direction.
Screening for and analyzing mutual funds. In-depth reviews of online discount brokers and their tools, features and flaws. Constructing a portfolio of investments and the issues involved, including risk management. In-depth reviews of some of the most popular investment-related software.
Using quantitative stock screening filters to identify possible investment and analyzing individual stocks. Determining the “true worth” of a company. Using technical indicators and charts to help time your buy and sell decisions. Using computerized tools and resources to prepare and file your personal income taxes. As a member of AAII and reader of Computerized Investing, chances are that you perform a significant amount of investing on your own. Though individual investors still call full-service brokers to place trades, many have now switched to fully using online discount brokerages. Since most online brokerages are similar in pricing, the difference between each lies in the features and research that they provide.
Like last year, this year’s online brokerage comparison provides an in-depth analysis of the features most individual investors use. I also point out some notable differences between the various brokers and highlight each broker’s strengths and weaknesses. Members who participate in the survey are asked to fill out a questionnaire regarding broker reliability and quality, along with individual questions concerning investor trading frequency, securities traded and portfolio size. The survey results for 2012 are shown in Table 1.
The five brokers that our members used the most were Scottrade, Fidelity Investments, Charles Schwab, TD Ameritrade and Vanguard. Trade Financial this year as the fifth most widely used broker by AAII members. All online brokerages dedicate a portion of their websites to explaining the measures they use to protect your assets and transactions, and it is worth your time to find and read through this information. To participate in our broker survey, visit www.
Surveys from the Quick Links tab. The survey is open year-round, and we look forward to your input. The overwhelming majority responded that commissions are the primary factor when selecting a broker, with services and convenience placing second and third, respectively. As a secondary factor, responders mentioned convenience the most, with commissions and services placing second and third. Still, there are several important items to keep in mind when considering a broker. It should be noted, however, that Vanguard does not have an active trading platform.
Trading platforms for regular users are all relatively similar. To execute a trade, users need to specify the action type, number of shares, ticker symbol, order type and order duration. Each broker allows you to place market and limit orders, and each usually also offers to handle stop, stop-limit and trailing stop orders. In addition, users can select whether the order is good until cancelled or only good until the end of the trading day.