Chapter 9
Choosing a Brokerage Firm
In This Chapter
Understanding the different types of brokerage firms
Shopping for a discount broker
Surfing for an online broker
When you invest in certain securities — such as stocks and bonds and exchange-traded funds — and when you wish to hold mutual funds from different companies in a single account, you need brokerage services. Brokers execute your trades to buy or sell stocks, bonds, and other securities and enable you to centralize your holdings of mutual funds and other investments. Your broker can also assist you with other services that may interest you.
In this chapter, I explain the ins and outs of discount brokers and online brokers to help you find the right one for your investment needs.
Getting Your Money’s Worth: Discount Brokers
Prior to 1975, all securities brokerage firms charged the same fee, known as a commission, to trade stocks and bonds. The Securities and Exchange Commission (SEC), the federal government agency responsible for overseeing investment firms and their services, regulated these commissions.
Beginning May 1, 1975 — which is known in the brokerage business as “May Day” — brokerage firms were free to compete ...
Get Investing For Dummies, 7th Edition now with the O’Reilly learning platform.
O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.
