At $4.95 per trade, with no inactivity charge and a $50 full outgoing transfer fee, Ally Invest’s fee structure is about as low as you'll find. Even though a rash of brokers dropped their commissions in 2017 to be competitive with Ally Invest’s $4.95 flat rate, Ally keeps its edge with a zero account minimum and enticing discount for active investors — equity trades drop to $3.95 for users with 30-plus trades each quarter or a balance of $100,000.
Measure your returns against an appropriate benchmark. This is essential advice for all types of investors — not just active ones. The bottom-line goal for picking stocks is to be ahead of a benchmark index. That could be the Standard & Poor’s 500 index (often used as a proxy for “the market”), the Nasdaq composite index (for those investing primarily in technology stocks) or other smaller indexes that are composed of companies based on size, industry and geography. Measuring results is key, and if a serious investor is unable to outperform the benchmark (something even pro investors struggle to do), then it makes financial sense to invest in a low-cost index mutual fund or ETF — essentially a basket of stocks whose performance closely aligns with that of one of the benchmark indexes.
We found Robinhood’s trading interface — both via its mobile app and its website — the most user-friendly of all candidates, making it a perfect option for the first-time trader. The design is minimalist, interactive, and easy to navigate. “Robinhood is a good fit for new investors because it offers a slick, modern app that allows you to trade efficiently,” says James Royal, a stock analyst and investing and wealth management reporter at Bankrate. “And of course, it's free, allowing you to invest money that would have otherwise gone into a broker's pocket.”
Research is provided for informational purposes only, does not constitute advice or guidance, nor is it an endorsement or recommendation for any particular security or trading strategy. Research is provided by independent companies not affiliated with Fidelity. Please determine which security, product, or service is right for you based on your investment objectives, risk tolerance, and financial situation. Be sure to review your decisions periodically to make sure they are still consistent with your goals.
The 2010s have been a boom era for online stock brokers. According to Statista, between 10% and 15% of all U.S. adults used an online broker at least once in 2018. While some major brokerages have remained the same (Charles Schwab), others have gone through mergers and acquisitions (E*TRADE acquired OptionsHouse; TD Ameritrade and Scottrade merged; TradeKing is now Ally Invest), and a new generation of millennial-focused brokers (like Robinhood and Acorns) has kept the old guard on its toes by lowering commission rates and minimum deposits. After digging into 25 trading platforms, here are the factors that set our top picks apart from the crowd.
*Offer valid for one new Individual, Joint or IRA TD Ameritrade account opened by 6/30/2019 and funded within 60 calendar days of account opening with $3,000 or more. To receive $100 bonus, account must be funded with $25,000-$99,999. To receive $300 bonus, account must be funded with $100,000-$249,999. To receive $600 bonus, account must be funded with $250,000 or more. Offer is not valid on tax-exempt trusts, 401k accounts, Keogh plans, profit sharing plan, or money purchase plan. Offer is not transferable and not valid with internal transfers, TD Ameritrade Institutional accounts, accounts managed by TD Ameritrade Investment Management, LLC, current TD Ameritrade accounts or with other offers. Accounts funded with $3,000 or more are eligible for up to 500 commission-free trade internet equity, ETF, or option trades executed within 60 calendar days of account funding. All other trade types are excluded from this offer. Contract, exercise, and assignment fees still apply. No credit will be given for unexecuted trades. Limit one offer per client. Account value of the qualifying account must remain equal to, or greater than, the value after the net deposit was made (minus any losses due to trading or market volatility or margin debit balances) for 12 months, or TD Ameritrade may charge the account for the cost of the offer at its sole discretion. TD Ameritrade reserves the right to restrict or revoke this offer at any time. This is not an offer or solicitation in any jurisdiction where we are not authorized to do business. Please allow 3-5 business days for any cash deposits to post to account. Taxes related to TD Ameritrade offers are your responsibility. All promotional items and cash received during the calendar year will be included on your consolidated Form 1099. Please consult a legal or tax advisor for the most recent changes to the U.S. tax code and for rollover eligibility rules. (Offer Code: 220)
How much money should I invest in stocks? If you’re investing through funds — have we mentioned this is our preference? — you can allocate a fairly large portion of your portfolio toward stock funds, especially if you have a long time horizon. A 30-year-old investing for retirement might have 80% of his or her portfolio in stock funds; the rest would be in bond funds. Individual stocks are another story. We’d recommend keeping these to 10% or less of your investment portfolio.