If you're not using an online stock broker for your investing, or you're not confident that you're using a great online stock broker, then read on. There are many ways in which an online stock broker can serve you well.
For starters, online trading offers very low rates. One major brokerage, for example, charges $9.99 per online trade versus $34.99 to place an order via a touch-tone phone or $44.99 to place an order with the assistance of a live broker. If you're buying, say, $1,000 worth of stock, you'd be forking over a full 4.5% of your order's value in commission costs to use the live broker. The online trade will cost you just 1%. You can find online stock brokers charging $7 or less per trade as well -- even zero.
Online stock brokers offer convenience, too. Their websites are available 24 hours per day, and you can easily look up your account balances and records of your trades. With a brick-and-mortar brokerage, you need to get yourself there during their working hours.
You won't get short-changed in the feature department with an online stock broker, either. Most major brokerages offer online trading, along with a host of other services like banking and the buying and selling of all kinds of securities, such as exchange-traded funds, bonds, options, and gobs of mutual funds. They generally offer retirement accounts and tools with which to evaluate your portfolios and their performance.
Better still, you'll likely be able to conduct more stock research than you thought possible online. A typical online stock broker will have lots of data and tools easily available, permitting you to look up real-time stock quotes, financial statements, key ratios, and more. You can also find research reports prepared by the brokerage itself or by well-known financial services companies like Standard & Poor's and others. And you can get all this while sitting on your couch in your pajamas with your laptop. Brokerages are coming out with mobile applications, too, so you can conduct a lot of business with your smartphone (though it's advisable to make sure you're on a secure network before entering usernames and passwords).
The old-fashioned style of trading involved expensive investment professionals, some of whom were not that talented or were vulnerable to conflicts of interest -- e.g., they might earn a commission for getting you to make certain decisions. Your precious nest egg was in their hands, and your ultimate performance was largely out of your control. The advent of discount brokers and the online stock broker has changed that, putting much more control in your hands if you want it.
Even if you seek professional advice, you might place your trades yourself after doing some due diligence -- all made easy via an online stock broker.
If you're interested in tapping the services of an online stock broker, it's not hard to find one. These days, just about any brokerage you can think of has an online interface where you can easily click in and take care of business.
Selena Maranjian, whom you can follow on Twitter,has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.