new investor and confused

That is like asking which is better, ketchup or pickels.

Do you want us to pick your funds and write the checks, too?

A lot of this is personal taste, what works well for you, and what your goals are. That is why you need to educate yourself, and then go find out what you like.

-john-

If you are new to investing and need some help, your first stop shouldn't be signing up for an account at one of the brokerage web sites. Instead, either visit an independent web site that offers a lot of tutorial material about how to get started in investing (like the "Classroom" section at morningstar.com), or a library or bookstore where you can get a good introductory book -- the "Investing for Dummies" book seems to be quite well-regarded, for instance.

Brokers like E-trade, Scottrade, TD Ameritrade, Schwab, etc are brokerage "supermarkets" where you can buy lots of different investment products. Your bank may also offer similar brokerage services. Which one is "best" is primarily a matter of personal preference.... which web site has the nicest interface or features you find most useful, etc. Compare the fees for the products and services you're most interested in or would use most often. Fidelity is both a company that manages their own funds, and a brokerage; last time I looked, their fees for non-Fidelity investments were quite a bit higher than you'd pay at any of the independent "supermarkets".

-Sandra

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I think Etrade is having some major financial issues. That may be an important factor.

Fidelity can certainly offer lots of help to newbies. Another one to consider is Schwab.

Try not to post your email address on the ng. You'll get lots of email from Nigeria.

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I would learn about the following 3-4 key subjects before opening an account anywhere:

1) Retirement planning 2) Taxes (and IRAs. 401ks and similar) 3) Dollar Cost Averaging 4) Asset Allocation and risk tolerance

This will get you started, but it will not help you choose a brokerage.

I would look at the following websites for education material:

1) CBS market watch 2) morningstar 3) Fidelity will have some material, read that, then also read another competitor's site (like T Rowe Price) to see what is real and what is advertising. 4) There are many many online forums which could also help.

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As I've said before, many folks new to investing think that "investing" is all there is to personal finance. There's more - and often "investing" (in the sense of selecting securities or funds in which to invest) is the *last* thing they ought to do. Among the things which come first: building up an emergency fund; getting adequate insurance; paying off high-interest credit cards; figuring out how to spend less than one earns; deciding whether to put money in a 401k or an IRA or a taxable account;

Once all that's done, deciding how to invest the money comes into play. Tyson's Investing for Dummies is quite good, but for the complete novice, I recommend his Personal Finance for Dummies first.

All true enough. For what it's worth, though, Schwab also has its own funds (and unlike the Fidelity funds, I don't think any non-Schwab brokerage can hold them, though I may be wrong).

Fidelity's "supermarket" prices are the same as everyone else - they charge back to the funds themselves for "NTF" funds (those are the "no transaction fee" funds). They charge the standard load for load funds. The only part which is expensive (and in my opinion, outrageously so, for a company which is generally otherwise pretty reasonable) is their fee for non-NTF no-load funds. For those, they charge $75/purchase. No charge for sales. (in fairness, that often gets one access to funds with very low expense ratios and/or no 12b-1 fees, and as a proportion of anything but a very small purchase, it may pay for itself pretty easily, especially compared with the hassle of, say, buying such funds directly from the fund company).

All the brokerages which have "supermarkets" have both NTF and non-NTF no-load funds, and they all charge somehow for non-NTF transactions. ETrade, for example, charges $19.99 each way on such (ie. $40/round trip, versus the $75/round trip at Fido). Other places have different rates, and different collections of funds available.

In many instances, it may be worth looking at ETFs instead of paying non-NTF fees. Not only are the funds expense ratios often lower, but so are the transaction fees.

[I'll leave it to others to look up fund fees at other places like Schwab, Scottrate, etc.]

Well, $75/purchase is not the "same as everyone else". E-Trade is $19.99. Scottrade is $17. Some of the brokerages charge a percentage rather than a fixed fee. Especially if you plan to make regular small purchases of funds, it shops around to find a brokerage where the funds you're most interested in are NTF, or at least shop around to find one with the best combination of large selection of NTF funds and low fees for the others. Also watch out for annual account maintenance fees or minimum account balance requirements, if you're starting out small.

-Sandra the cynic

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You may be wrong :-) For example, here's the list of Schwab funds you can buy at Fidelity:

Some brokers manage to get load waivers; Schwab is particularly good at that. For example, Victory funds.

Once you have a position at Fidelity, you can make additional purchases for $5, by scheduling automatic periodic investments (and cancelling after one or more, as desired). Sales are still free.

(see footnote on page) Fidelity has excellent (low) fees on bonds, and middling pricing on equity securities (stocks, ETFs).

WellsTrade gives 100 free trades/account/year, so long as you have a linked PMA checking account at Wells Fargo. (The bank will charge for that account unless you maintain $25K in linked assets, including the WellsTrade accounts.) ThinkOrSwim gives three free fund trades per month (any fund they carry, some 12,000).

These days, vanilla index funds (e.g. S&P 500, EAFE, total market) come with expense ratios as low as ETFs, without the transaction costs, and without the buy/sell spreads (which are the real, albeit somewhat hidden) costs of ETFs. A newbee should not, IMHO, be slicing and dicing the market with narrowly focused ETFs.

Mark Freeland snipped-for-privacy@sbcglobal.net

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