Online brokers are taking the investment world by storm! By moving your portfolio to an online broker, you can save a great deal in commissions and fees. But dealing with an online broker is quite different from doing business with your local Merrill-Lynch office.
You'll typically pay much smaller commissions and fewer transaction fees when dealing with an online broker. Why? Two reasons: automation and fewer services.
Online brokerage accounts are automated. Your trades are ordered and placed by computer software instead of a real life broker. This streamlines the trading process and saves you money.
With a full service broker, in exchange for those higher commissions and transaction fees, you'll get personalized advice and professional research services that you simply won't get with most online brokers.
But if you prefer doing your own research, switching to an online broker is a wise move. Why pay for services that you prefer to do for yourself anyway? Of course the downside is if your investments don't turn out so well, you won't have a broker to blame.
Most online brokerage firms offer all of the regular investment vehicles, including stocks, bonds, CDs, and mutual funds. They also offer comprehensive online tools for researching and evaluating prospective investments.
Online brokers make it easy to monitor the performance of your investment portfolio. A wide variety of reports can be accessed online or downloaded to a spreadsheet, which makes it easy to see where you stand at a glance.
The bottom line is you can save a lot of money and take complete control of your own investment portfolio by switching to an online broker. But if you prefer the guidance and hand-holding provided by a professional broker, you would probably better off staying with your current brokerage firm.
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