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Investment Brokers

An investment broker or stock broker is “1. An agent that charges a fee or commission for executing buy and sell orders submitted by an investor. 2. The firm that acts as an agent for a customer, charging the customer a commission for its services” (Investopedia).  In this article, we will be looking at companies that serve as stock or other investment brokers; that is, at companies through which you can invest in mutual funds, purchase individual stocks, purchase bonds, or engage in other related investment activities.  There are many good companies through which one can at very minor expense acquire and hold such investments.  You can basically think of an investment brokerage company as something somewhat similar to a bank.  In the bank, you can put your money in a checking account, savings account, CD, and so on; you choose what you want to invest in, and the bank holds your funds in the type of investment you wish, sends you statements, and so on.  With an investment brokerage company, you choose what you want to invest in–a mutual fund, individual stocks, government bonds, corporate bonds, precious metals, and so on.  The brokerage firm holds your funds, sends you statements, and so on.  With a bank, you consider what rate of interest you get on your funds, the quality of the customer service, the ease with which you can use their website, and other related factors.  With an investment broker your rate of return is determined by what you invest in, not by the broker, but different brokers charge different transaction and service fees, so your rate of return still bears some connection to the company you choose to work with.  Customer service and the ease with which you can use the brokerage firm’s website are still important factors.  It is wise to have an account with an investment broker so that you can get a high rate of return on an IRA and in both retirement and non-retirement accounts invest in God-honoring and Bible-based mutual funds.  You can also invest in precious metals with an brokerage firm.  Getting started is really not more difficult than opening a bank account.  What are some quality investment brokerage companies?

Fidelity Investments

Fidelity Investments is a well known investment firm with a well-deserved reputation for good customer service.  One can easily purchase our recommended Christian mutual funds, run by Eventide and the Timothy Plan, as a Fidelity client.  The Eventide Gilead Fund (ETGLX) and Eventide Health Care and Life Sciences Fund (ETNHX) are some of the many No Transaction Fee (NTF) funds with Fidelity, so you can purchase them without having to pay a Fidelity transaction fee.  You can also sell them without a transaction fee, as long as you hold them for at least sixty days (the mutual funds are not designed for buying on Monday and selling on Tuesday, but for longer term investing).  Fidelity also assesses no additional fees for purchasing any of the Timothy Plan funds; fees are only those that the Timothy Plan itself charges.  One can also purchase individual stocks or bonds and engage in many other kinds of investment activity with Fidelity.  They have great research tools on their easy to navigate website to enable investors to acquire detailed information about companies.  They charge a competitive $7.95 transaction fee for online equity trades, regardless of size (see their complete list of trading fees), a fee lower than Charles Schwab’s $8.95 or E-Trade Financial’s $9.99, although higher than the rock-bottom fees of discount brokers such as OptionsHouse ($4.95), eOption ($3.00), or PlaceTrade Financial ($0.01/share, $1.50 minimum).  However, unless you plan on spending hours researching individual stocks and then engaging in daily or weekly buying or selling, the slightly higher fee is going to be offset by Fidelity’s great customer service, free investment advice, whether in person, over the phone, or in their online Learning Center, and other benefits (see their “Why Choose Fidelity?” page).  Since I do not feel confident that I have either the time or the knowledge to determine whether a particular stock is a good value, I simply purchase Eventide’s Christian mutual funds and pay no transaction fees at all.  Fidelity offers some of the best cash back credit cards available.  They also offer a Cash Management Account that functions like a bank account, with no monthly fees or minimum balance requirements, free checks, and all ATM fees refunded within the USA.  (Their brokerage accounts require an initial opening deposit of $2,500, but their IRAs have no minimum opening balance requirement if you set up automatic contributions from your bank account.)  Furthermore, you could well have a Fidelity Investment Center within driving distance where you can receive free face-to-face investment advice and engage in other transactions.  Of course, phone and online services are available 24/7.  If you link your bank account to your Fidelity brokerage account you can initiate an incoming funds transfer online or over the phone and the funds can be available for investing immediately, even before they are withdrawn from your bank.  Fidelity treats its customers very well, and I am happy to state that I am one of their many millions of satisfied account holders who have entrusted the company with literally trillions in assets.  Finally, I like the fact that Fidelity still offers free paper statements in the mail–I simply do not like keeping track of e-statements. (Of course, if you do like e-statements instead, you can opt to get them free instead.)  Click here to open an account with Fidelity in just a handful of minutes.

Other Investment Brokers

There are many other investment brokers that are worth considering, such as Charles Schwab, E-Trade, TD Ameritrade, and TradeKing.  A search of the Internet will reveal comparisons of the products offered by these companies, often by people with a financial interest in promoting one or more of them.  An extremely high priority for the Christian investor ought to be the availability of Christian mutual funds without additional fees (as one can purchase them with Fidelity).  Consumer Reports also has unbiased evaluations of brokerage services available.

 

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