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Where I buy stock from

askbob
Posts: 7,254
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7/1/2011 2:39:06 PM
Posted: 5 years ago
i don't buy stock as that is generally extremely unintelligent unless you have a large amount of money.

ETFs and no-load index funds are what you want.

www.vanguard.com

Open up a Roth IRA (if the money you are seeking to invest is earned and was taxed as income)

A roth IRA will allow you to have tax free interest

The ETF has no buy/sell fees so the only money they take is 0.15% of your profits at the end of the quarter.

Comparison:

you have 1000 dollars to invest

You buy 7 stocks on e-trade - cost(49 dollars)
You make 100 dollars of profit
You sell 7 stocks on e-trade to reap the profit - (49 dollars)

At the end of the year you have 1002 dollars and have made a net return 0.2% with a nominal return of 10%

Same situation except you buy 7 etfs on vanguard
you make 100 dollars profit
you sell 7 etfs on vanguard to reap the profit
you end the year with 1098.35 a net return of 9.835% with a nominal return of 10%

In this scenario transaction costs are $98 or 98% vs. .15 or .15% of profits.
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