Thursday, September 21, 2017

Cheapest place to buy and sell stocks

Stock investing. Perhaps you've never invested in stocks, perhaps you've been doing it for years. In todays high-tech world it's never been easier and more accessible to invest in the stock market. I've been doing it for years and one of the things I've hated most about it are the fees just to buy a stock and then again when you sell a stock. It puts you in the negative right away and hits you over the head on the way out. Fees typically range in the $5-$10 range.

Where is the cheapest place to buy and sell stocks?

Robinhood, Robinhood, Robinhood!!! I've been using Robinhood for over a year now and it's the new, best way to invest in stocks. Why? Cause it's super easy and IT'S FREE. That's right, no fees to buy OR sell your stocks. Plus right now, they are GIVING AWAY STOCKS when you sign up (read how below).
You can buy 1 stock or 10,000 stocks - no charge!
This is unheard of. No one else does what's the catch? How does Robinhood exist and make money? 2 ways:
  1. They make money on un-invested cash that's sitting in your accounts (all banks do this)
  2. They offer Premium services that allow things like
    • Margin account (using their money to buy/sell stocks)
    • Instant access to deposited funds (usually it takes 2-3 days from deposit for your money to become available to trade)
    • No waiting for funds to settle before you can trade again (it takes a few days for traded stocks to become 'settled' or available again before you use that money to make another trade.
    • Access to after hour trading (pre and post market)
While their premium stocks do cost money, the benefits are actually pretty good and if you trade a lot could be worth the extra fees. But for most people, the basic free service is AWESOME.

How to get a Free Stock

Plus, right now when you sign up and fund your account you get ONE FREE STOCK.
The stock will be random and range in value from $3-$150. You do have to sign-up via a referred link. Here's mine below if you want to use it. Disclosure: I get one free stock as well when you use the link below. If you have a referral link, feel free to share it in the comments for others to use.

Advantages of using Robinhood over traditional brokerage companies (i.e. Fidelity, Vandguard, E-trade, etc.):
  • It's free!!!
  • Super user friendly and easy to use
  • It's all done on your smartphone
  • You can buy a small amount of stocks - i.e. if you wanted to buy 1 stock XYX that cost $10 a typical brokerage would charge you about $7 just to make the trade, so obviously you wouldn't be purchasing smaller amounts of stock like that. With Robinhood, you don't have to worry about that.
  • Integrates/uploads very nicely with tax services such as turbotax for easy to fill out taxes.
Disadvantages to using Robinhood:
  • It's all on their App - no desktop. Some people aren't comfortable with that, but most of the younger generation prefers that.
  • You can't trade mutual funds, ETF's, options, etc.- just single stocks. However, you can still purchase small amounts of stocks so you can in effect create your own mutual funds.
  • Customer Service is a little difficult to work with. It's done online and not via a phone number. For me this is the biggest disadvantage, but really not ever having to contact customer service.
  • No access to advanced research, charts, etc. They do have information on stocks, but it's the basics so if you need more research you'll have to search it yourself.

If you've never invested in stocks, this is a terrific way to get started slowly. If you invest a lot, then this is a simple, free way to save money and continue investing.

Overall, Robinhood is a no-brainer for how you should be investing in SINGLE stocks. For mutual funds, indices, options, ETF's, then Vanguard or another brokerage is the way to go.

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