Anyone use Etrade? Is another service better?

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Postby kmull » Wed Jun 13, 2007 5:27 am

My Dad had E-Trade for a while and the fees ate him alive. If you didn't have some sort of activity each quarter, and your balance was under $10,000 they hit you with a $40 fee. Ridiculous and not exactly "buy and hold" friendly.

I've had a Firstrade account for a while, and referred him over. They'll credit you the $50 that some other firms charge for you to leave them. Trades are $6.95 for stocks and $10.95 for no load mutual funds. Not a bad deal, and no fees whatsoever.
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Postby pf101 » Wed Jun 13, 2007 8:26 am

koreys wrote:Ok, everything you said was understandable. One last question when it comes to purchasing individual stocks. I understand what you are saying about avoiding pitfalls by choosing individual stocks that may not perform so well over time. What if the stock is that of a company you work for and they have had a past performance that has been good over time and the company offers a good purchase/match plan?


Be really careful when purchasing employer stock. Think Enron. Those folks rolled much of their investment into their company stock and they also relied on their company to provide their income so when the company went belly-up they not only lost their current income but they lost all of their investments as well. Had they diversified, the job loss would have been bad but at least they would still have their investments.

You should never have more than 10% of your money in company stock. If they give you good incentives, take them but then get rid of that stock as soon as you can (while mitigating taxes). Don't let it just build and build because that is really putting too many eggs in one basket. You may want to spend a little money and talk to an EA or some other sort of tax advisor who knows about ESOP and ESPP plans and the tax consequences that go along with them so you make sure you're planning appropriately.

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Postby tinyhands » Wed Jun 13, 2007 9:36 am

I would only add to the above by saying that unless you're at the executive level and have specific knowledge about your company's future performance (bordering on insider information) then you're probably not much better off investing in your company than I am. That puts you back in the position of trying to be a "stock picker" relying on either past performance (bad), fundamental analysis (arguable), or pure speculation (even a broken clock is right twice a day). If you have reason to believe that your industry is healthily appreciating, a much safer play is a sector index that includes your firm.

The woman clicking away in the next cubicle worked for Enron and lost a substantial amount of her retirement savings. She's in her 60s and, in addition to severely downgrading her lifestyle, I'm not sure if she'll ever really be able to retire in the conventional sense. This town has far too many "eggs in one basket" stories.
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