As an investor, you need an account with a brokerage to gain access to the financial markets. When choosing a broker, you definitely have a lot of options to consider. Some brokers are better than others and the quality of your broker can make a big difference in how successful you are as an investor. One of the leading brokers in the industry today is Zecco. Zecco offers a lot of features at prices that are superior to what you will find with other brokerages.

A Top Discount Broker

Zecco is considered to be a discount broker because of the cheap rice is that they offer on commissions. With many brokers, you have to pay a fee that is based on a percentage of how much you are trading. With Zecco, you pay one flat fee regardless of how big the order is or your account size. When you buy regular stocks with Zecco, you’re only going to have to pay a flat fee of $4.95 for each trade. This is definitely on the low-end of the market and is quite a bit cheaper than some brokers.

While you pay $4.95 for regular stock trades, you will have to pay a little bit more than that if you want to get involved with penny stocks. For penny stocks, the commission is $6.95 per trade. This is because penny stocks offer a little bit less liquidity and are somewhat harder to come about in the market. In addition to offering stocks, they also offer access to options for a flat fee of $.65.

If you are the type of investor who likes to trade frequently, Zecco is definitely one of the best options in the industry for you to consider. If you were to choose one of the more expensive brokers, the extra commission that you would pay could cut into the amount of money that you have available to trade. This means, you’ll end up buying fewer shares and spending more on brokerage fees. With the power of compound interest, you need to get as much capital invested early on as you can. By using Zecco, you give yourself the best chance to succeed over the long-term.

What You Can Buy With ZECCO

Obviously Zecco gives you access to the stocks that are traded on the major stock exchanges and those that are considered to be penny stocks. However, you can also put your investment capital into other things like ETF’s, mutual funds, bonds, commodities, CD’s, precious metals and even Forex. This gives you a lot of flexibility in what you can invest in and helps you diversify your portfolio. A lot of other brokerages only give you a few limited options like stocks and bonds.

If you don’t have quite enough cash to buy a security, you can keep the leftover in a money market sweep account. This makes it possible to earn a decent return on the money that you have just sitting in your account. It’s a little bit better than what you could earn from a regular savings account.

Doing Your Homework

If you are going to invest with Zecco, or any other brokerage for that matter, you’re going to need to do some research on investments. You can’t simply pick an investment at random from a list and hope to have a realistic shot to make a decent return. Luckily, Zecco offers a number of tools that you can use for your investment research needs. For example, you can use their investment screener to narrow down your options based on specific criteria that you list. They also provide you with access to an options calculator so that you can quickly compute the value of an options contract to you.

Educational Resources

In addition to the research tools, they also offer a number of educational resources that you can turn to when you don’t understand something about the markets. They have detailed tutorials that help you learn the basics of investing so that you can make more informed decisions in the future.

Technology

One of the cool things about Zecco is that they have invested some money in technological advancements so that you can trade easier. One example of this is the Zap Trade feature that they offer. Zap Trade is a plugin that you can download for your Firefox Internet browser. Once you are signed into Zap Trade, it makes it possible for you to place a trade directly from your browser without even navigating to the Zecco site. The plugin even scans the page that you’re on for stock symbols. If there is a pertinent stock symbol, it can look it up in the Zap Trade interface so that you can place a trade easier. This can come in handy if you happen to be reading a piece of financial news and you’re interested in investing in a company or getting a stock quote.

Another example of the technology that they provide is their Zecco iPhone app. With the Zecco iPhone app, you can do research, get quotes, place trades, look at charts and do many other things that you could do on your computer. If you are on the go quite a bit, this can be an invaluable tool to have at your disposal.

Considerations

Zecco puts an emphasis on customer service and making sure that your funds are safe. They are a member of FINRA and they also offer a feature known as a “trade key.” When you login to your Zecco account, you have to enter this trade key before you can place a trade. This makes it possible to prevent anybody who does not need access to your account from placing trades.

If you are looking for a broker and you don’t want to spend a lot of money on trades, Zecco is one of the best in the industry. You can save money on the costs of your investing and help yourself gain access to all of the investment options that you may need access to.

There is a little known discount stock broker out there by the name of Firstrade.  While not as popular at Zecco or Options House, Firstrade might be a great option for you.  Firstrade offers a wide range of financial services and investment options.  They have everything from Roth-IRAs to traditional IRA accounts to individual trading accounts.

First, a little history of Firstrade…

-Founded 25 years ago as First Flushing Securities focusing on smaller communities.

-Firstrade was officially launched in 1997

-In 2005, Firstrade was named “best deal” by Smart Money Magazine

-Firstrade continues to rapidly grow and put an emphasis on customer service

Usability and site design

Firstrade’s site is extremely clean and easy to use.  I love their tabbed navigation bar and clear login box on the right side.  Firstrade makes it clear as to what they offer and always make it known what the latest deal or marketing program is going on.  Research is also very easy on Firstrade’s website.  They provide simple, easy to use screening tools and track stats of your return on investment.

Financial Products

-Stocks: You have a choice of a wide variety of investment options.  Choose stocks from NYSE, AMEX, NASDAQ, and other OTC markets.

-Exchange Traded Funds

-Bonds/CDs/Fixed Incomes

-Mutual Funds

-Options

-Dividend Reinvestment

-Roth IRA and 401k support

Pros

• $6.95 flat fee for real time trading, lower than Scottrade
• Free mutual fund investing
• Free dividend reinvestment
• No inactivity or account maintenance fees
• $50 Firstrade referral bonus
• 250 free trades ($1,000+ deposit)

Negatives

• $6.95 commission is not cheape compared to Zecco or Options House
• No stand alone trading platform, web based only
• Slow fund transfer
• No systematic investment plan yet
• Can’t buy fractional shares

All in all

Firstrade offers a wonderful selection of mutual funds, but stocks and large orders are too expensive in my opinion.  Also, Firstrade’s platform is outdated and probably makes more sense for options traders.  Plus, their education sources are slim to none.  They need to do a better job at attracting the average stock trader or investor.  For cheaper brokerages with better options, check out Options House and Zecco (both I highly recommend.)

READERS: Has anyone used Firstrade before?  What’s your experience with them?  Any good?  Any horror stories?  

There’s a buzz going around within the investment community.  You are all familiar with the big players in the brokerage community like Options House. There is a new kid on the block.  This new kid goes by the name of Betterment.com.  Like other online discount brokerages, Betterment gives you the option of holding ETF’s and bonds in your account.

This might sound like another brokerage, but it’s different.  Betterment’s goal is to simplify your investment accounts.  There is a common concensus that investment brokers are complicated and most people get confused when trying to invest.  Betterment simplifies the process and streamlines it through the use of automation.  Simply select your funds, put it on autopilot, and you don’t have to look at your funds for years.  Sounds pretty good doesn’t it?  Let’s take a closer look…

Betterment Basics

Investing with Betterment is a simple process.  First, you need to sign up through their website.  Once you have a profile setup, you need to connect your checking account and start transferring money to your Betterment account.  It’s important to point out that there are no fees associated with these transfers.  Use the slider feature to control your risk tolerance and adjust as necessary.  Then it’s up to you how often you want to adjust your asset allocation.  Simply by opening a new account, they will fund your account with a $25 bonus, sweet!  Here is a great tour of their site, they explain it better than I can 😉

http://www.youtube.com/watch?v=GwbAHGVEQTA&feature=player_embedded

Investment Options?

So, you have some money in your account now, what’s next? Well, Betterment has already done the grunt work for you.  They have picked 6 ETF funds that represent the United States stock market.  Alongside those six funds, they also have chosen two bonds funds.  Here are their fund options:

Stocks:

• 20% Vanguard Total Stock Market
• 20% iShares S&P 500 Value Index
• 20% iShares S&P 1000 Value Index
• 15% iShares Russell 2000 Value Index
• 15% iShares Russell Midcap Value Index
• 10% DIAMONDS Trust Series 1

Bonds:

• 50% iShares Barclays TIPS Bond Fund
• 50% iShares Barclays 1-3 Year Treasury Bond Fund

This mix of stocks and bonds is a fantastic asset allocation.  Coming from someone who is well versed in what funds to invest in, Betterment has done a great job picking these out.

What separates Betterment from the rest?

So, what makes Betterment more effective than other brokers?  Well, their visualization and automation tools are a couple examples.  Most people are visual, and Betterment knows this.  I love their visual tools for forecasting  returns  years down the line.  For example, you can play around with their forecasting tools and see what your account will be worth 40 years down the line and such.  It’s cool to see how the asset allocations you make today drastically affect returns down the road.

Along similar lines, Betterment has great tools for automation in regards to asset-allocation automation.  If you set it and forget your savings accounts, you could see your allocation percentages start to swing too heavy to one side.  Betterment has an automation tool to keep that from happening so you don’t have to worry about it.  This is a great feature for people on the go.

Sounds good, but what are the fees?

This is where Betterment will scare off some investors.  If you have account with under $25,000, the fee will be 0.9% on an annual basis.  I know this was something that scared me off.  I like to plan my own investments and I know enough to make those decisions.  However, if you’re too busy to do that, 0.9% fee is not bad for the service you’re getting with Betterment.  The good news is that the Betterment fees decrease with the more money you invest.  If you have an account over $25,000 the fee will be 0.7% annually.  If you have over $100,000, the fee is 0.5%.  Anything over $500,000 is 0.3%.  Starting out, the fee is pretty expensive but decreases over time.  This is something that you will need to decide.  To some, it just won’t be worth it.  For people new to investing, this fee is nominal.  It just depends on your individual experience.

Amazing flexibility

Betterment is setup for people who want flexibility.  It’s ridiculous how much flexibility you get with Betterment versus other brokers.  Here is a summary of the flexibility Betterment provides:

-No  minimum  initial investment

-Set allocation depending on your savings goals.  Simple slider makes this very flexible

-Easy to move money between Betterment and your checking account

-Activity tracking feature to track withdrawals and additions

Is my money protected?

Like any other respected brokerage, Betterment is insured up to $500,000 by SIPC. You can rest easy about your money.  Here is some more info regarding their money insurance policy:

Betterment accounts are SIPC protected (up to $500,000 per customer) against losses resulting from fraud or mismanagement. SIPC coverage means that if anything happens to Betterment you will get your securities back promptly. Unlike FDIC insurance for banks, SIPC does not protect against losses due to normal swings in the market.

Conclusion!

Betterment is a wonderful way to invest for people on the go.  I would not recommend Betterment to people who know how to manage their investments due to their high expense fees.  I do love how their passion is to reach average Americans and help the masses save for their retirement.  All in all, they run a great brokerage.  I also like the automatic asset re-allocations.  This is unheard of in the investment community, such a great tool.

If you are looking for a “set it and forget it” broker for your retirement accounts, Betterment is the way to go.  Don’t forget to open an account now with the $25 bonus below!  Betterment could be you new best friend in the wild world we call investing. Start investing today!