Choosing a Broker

Introduction

So far at here Dynalect, the biggest thing we’ve been focused on is which securities offer the best opportunities for young investors. While that’s certainly important, it’s important to understand how to invest money once you know what you want to invest in. Some questions to consider might be: Who are the best stock brokers? Which brokers offer the lowest fees? What service is the easiest to use?

Glad you asked!

Robinhood

Robinhood is an incredibly easy to use investing platform that allows you to purchase domestically traded securities without paying transaction fees. Trading fees can add up quickly for people who are interested in taking a more active role in managing their portfolio, but with Robinhood, you can make 100 trades a day and still end up with $0 worth of fees for using their service. All of the members of the Dynalect team use Robinhood to trade their own personal portfolios, and we highly recommend it!

TD Ameritrade

TD Ameritrade is a brokerage service offered by TD bank. It charges a $6.95 commission for stocks and ETFs, and it has a no minimum balance requirement, meaning you don’t have to keep any money in the account. The service provides access to several trading platforms where users can trade stocks, ETFs, mutual funds, bonds, options, and more. TD Ameritrade also offers free access to many third party research sources, allowing you to do extensive research on an investment without having to open more than one account. Overall, the service is excellent for investors who want to have one go-to service where they can do research and manage just about every type of investment they have. However, investors that tend towards making more small volume trades should be wary of the $6.95 trading fee.

Interactive Broker

Interactive broker is an excellent full service platform that allows you to invest in both domestic and international securities, unlike the current version of Robinhood. Interactive Broker is also an options trading platform for those of you who are interested in branching out to the derivatives market. Interactive Broker has several cool features that make it especially easy to use; for example, there is a chat bot where you can type something like “Buy 4 shares of Apple,” and it will execute without you having to go through the normal process. Small details, sure, but interesting nevertheless! The real kicker with Interactive Broker is the low fee structure. You can find more details here, but the the bottom line is that IB charges $0.005 per traded share, with a minimum fee of $1 per trade, and a maximum fee of 0.5% of the total traded volume. If that doesn’t make a ton of sense, don’t worry. Click on the link above and have a look at some of their example trades! Fees for options are slightly different, but can also be found at the link above.

Acorns

The second is Acorns is a more passive investing platform where users simply deposit their money into an account, set a desired risk level, and then let the financial managers at Acorns do the rest! The Acorns platform invests your money throughout a satisfyingly diverse portfolio, which includes private and public bonds, and stocks of all types. The app also has all kinds of neat features that millennials are certain to like such as allowing users to link their credit or debit card for the sake of rounding up each purchase to the nearest dollar and investing the change. Acorns is free for college students, and then only 0.25% annually for accounts over $5,000 and $1/month for accounts under $5,000.

What are your thoughts?

The team at Dynalect is always looking for new ways to invest our money creatively. If you have any ideas or suggestions, let us know!