The stock market remains one of the biggest stories of 2018. Whether it’s the ongoing influence of Obama’s economy, or the introduction of the whirlwind of Trump (or some combination of the 2), the S&P 500 continues to top records. The United States is in its second ever longest economic expansion. These economic gains have not been universal, but many nations are seeing similar moonshots. Driven largely by technology companies changing the way we interact, drive, and acquire information, no one knows when the party might end or how much more room their might be to grow.
Whatever the future holds, you’ll need a high quality broker in order to get in on these gains. We’ve chosen some of the best modern stock brokers, to help you start your investment career as well and soon as possible.
How We Chose These Stock Brokers
In the modern age, human stock brokers are becoming less and less useful. We’ll always need human advisors in certain situations, but the cost of a stock broker salary combined with the savings of new digital and robo advisor trading methods turn high fee personal managers into walking dinosaurs. The days of calling your stock broker in order to make a purchase or sale are over. The stock brokers we’ve chosen are entirely digital platforms.
To make our list, each broker must be efficient, affordable, have a strong selection, and be honest in its dealings with its customers. A new class of investor is entering the markets for the first time, specifically because of the convenience and affordability of these platforms. We’ve also included a selection or two for experienced investors. Not all of these stock brokers will work for every customer, but there’s something for everyone in this list.
Note: These are in no particular order. But this is a list, stocksso we used numbers.
#1 Best Stock Broker of 2018: Vanguard
- Can be the cheapest option, Variety of account types supported
There are no two ways about it, Vanguard is a great stock broker. However, not everybody is wooed by this investment platform mainstay. Vanguard introduced the Exchange Traded Fund (ETF) to the world. These financial products bundle together dozens or hundreds of stocks, selling them all together under one product at one price. For example, you can invest in Emerging Markets – hundreds of stocks from dozens of countries – by making a single purchase: VWO.
Another benefit of the ETF is that its associated securities are not chosen by a human manager (with human manager costs). Instead, the selection of stocks is taken directly from an index, like the S&P 500, or European Mid-Cap securities. Because there are no human broker costs built into these ETFs (and similarly constructed mutual funds), their costs bases are typically under 0.1%. That’s shockingly low when considering some managed funds from competitors cost upwards of 2% or more!
Of course, you can buy other stocks with Vanguard, just like the other guys. Vanguard supports IRAs, Solo 401k’s, 529 plans, and HSAs. If you’re using a Roth tax protected account (Vanguard’s speciality), you won’t have any tax burden for buying and selling securities. All in all, many traders feel that Vanguard gives you what you need and nothing you don’t. Others don’t agree.
Vanguard isn’t going to display impressive visuals, provide promotions and incentives, or do anything flashy or (we think it’s fair to say) modern. Vanguard is stodgy but effective. Their bare bones approach reflects their values, and their trillions of dollars in managed assets indicates that many investors agree with this philosophy. However, if you want a more impressive package, you’ll need to look elsewhere. We would advise you to consider, though, what are the extra bells and whistles costing you, and how much advantage to you gain from them?
#2 Best Stock Broker of 2018: eToro
- CFD platform that offers the largest S&P 500 and FTSE 100 stocks
eToro is one of the largest retail brokerages on the market at the moment. Its main product it offers are CFDs and it covers a huge amount of assets with these. Forex, cryptocurrencies, commodities and also stocks.
One of the biggest benefits to using providers like eToro is that you can leverage your position, meaning that you do not need to put your full investment into the asset, this reduces your risk of significant losses however one of the issues with this is that should the market go below your margin available, you will automatically be taken out of the position, which will result in a loss.
eToro offers stocks of some of the largest companies in the world, both S&P 500 and FTSE 100 companies. It also provides a copy fund whereby you can see what other investors have bought and what their portfolio looks like. This is a huge advantage for those who are relatively new to investing and a reason why eToro is so popular with beginners. Alongside this, the platform also offers state of the art charting software, so you can accurately enter a trade at the price intended. With risk management tool as well, you can decide to get out of an investment at a certain level if it appears to be going against you or on the flip side, it will take profits for you at a predetermined price.
One negative about investing in CFDs is that you are not due any dividends from the company you invest in, so whilst there are a huge amount of reasons to use eToro, you should identify a strategy you want to use when investing.
You can open an account up to £2,000 with out any identification and so it is very easy to get started!
#3 Best Stock Broker of 2018: Fidelity
Fidelity is one of the old-school investment brokers who has adapted gracefully to the modern internet era. The company still has offices all round the world, making it easy to get in touch with a human rep if you run into trouble. But the company has managed to automate so many of its services that you can likely do a decade’s worth of online trading without ever having to make a phone call.
Fidelity offers users a two year window in which to take advantage of more than 300 free to trade securities. They’ve also adapted certain bundled security products just as Vanguard did with their ETFs decades ago. If you use only these products, Fidelity can be just as affordable as Vanguard, with a bit more flash in the packaging. Some users find Fidelity’s trading platform to be more sophisticated than Vanguard’s, and for some types of more complex trading, this is actually true.
Fidelity’s costs go up once your 2 year period has elapsed, and/or once you’ve stepped outside of their free/low cost products. Trades after this point cost $4.95 apiece, with an extra $0.65 charged for options contracts. This is on the low side of investing platforms in 2018, especially as newcomers like Robinhood add free trading.
All in all, Fidelty Investments is a fully featured brokerage service for knowledgeable investors, or new investors who are ready and willing to learn.
#4 Best Stock Broker of 2018: Robinhood
- Cheap, Modern, Frequent enhancements
While we’re on the subject, let’s talk about Robinhood. Robinhood the hype machine. Robinhood and its free trades. Robinhood and how it makes money.
Robinhood has set in motion a media juggernaut trying to get Millennials and other interested parties to invest with their platform. Their big selling point is free trades. That’s right, while older competitors are charging $5-$10 per trade, Robinhood doesn’t charge anything…usually. Robinhood does charge $10 per trade when one of their employees assists. They also rake up millions of tiny transactional costs of about one penny each. There are other revenue methods, but it’s unclear if Robinhood can earn enough cash to stay afloat, or to continue offering free trading in perpetuity.
For now, however, Robinhood is a pretty good deal. They’ve got most stocks and ETFs you would want to trade, a new batch of cryptocurrencies, and are adding more trading features all the time. Robinhood used to be 100% mobile, but recently they’ve added a browser version of the broker platform. Robinhood users can now trade options as well.
Robinhood may not be the fully featured stock broker platform that older investors are accustomed to, but it’s quickly becoming more sophisticated. In the opinion of this writer, Robinhood has an important place in the market, drawing in new investors who might not otherwise invest without such a modern and simple platform to turn to.
Robinhood has thousands of customers with account balances of less than $100, but this doesn’t mean it’s a stock broker just for amateurs. Most traders with any experience will find some value in this platform. If you’re a newcomer who likes the look of Robinhood, and this is the only way you’ll actually try investing, Robinhood is the way to go.
#5 Best Stock Broker of 2018: Charles Schwab
- Affordability possibility, Fully featured stock broker platform
Your father’s stock broker company has stepped into the modern age. With a fully featured platform and competitive robo advisor services, Charles Schwab makes a case for itself in 2018. CS ETFs and mutual funds are some of the cheapest we’ve seen in the industry, competitive with Vanguard and the other most expensive stock brokers. There are ways for users to even earn 500 commission free trades.
The downside comes with the phrase “there are ways”. Charles Schwab requires a $1,000 initial deposit. “There are ways” to have the company waive this requirement, but that’s a major barrier to entry for new users. “There are ways” to earn hundreds of free trades, but this is just extra work for the user to shoulder. We wish Charles Schwab would make its best features standard. But if you’re willing to learn the ropes, you can benefit from these offerings.
Another downside is that if you want to buy non-Schwab funds, you’ll pay through the nose to do so. General commissions are a moderate $4.95. Considering this service as a whole, Charles Schwab can be affordable if you use it the right way. But doing so won’t be as convenient as finding the benefits of some of its competitors. Nonetheless, this process will appeal to a certain class of investors, and maybe that’s exactly how Charles Schwab wants it.
#6 Best Stock Broker of 2018: TD Ameritrade
- $0 minimum balance, Free ETFs, Commission free funds
TD Ameritrade offers value unseen elsewhere, but charges fees higher than you’ll find most places. It’s easy for new investors to start because TD Ameritrade has no minimum balance for accounts. Start with $5 if you want. You won’t be able to buy much, but TD Ameritrade will welcome you anyway.
There are more than 2,000 free to trade mutual funds with TD, giving you a fair amount of choice for your $5. Plus, TD Ameritrade offers up to $600 bonuses for certain user actions, so if you’re willing to jump through a couple of hoops you can significantly boost your startup capital. On the other hand, if you want to trade anything outside TD’s list of free offerings, you’ll pay $6.95 per trade – the highest of any stock broker on this list.
We recommend TD Ameritrade for people who want to invest using a small set of free mutual funds. Thousands of people have become millionaires this way, and you can too if you contribute enough money. You might also get a lot out of the service if you simply don’t mind the higher trading fees, or if you make only a few high volume trades so that these fees don’t add up.
Users who like TD will enjoy a fully featured stock broker platform that’s friendly to new and experienced users alike.
Final Thoughts on Stock Brokers in 2018
Like much of 2018’s corporate landscape, today’s stock brokers have more competition than ever online. This is incentivizing them to add features and drive down costs, in order to gain the most market share. Take advantage of these conditions by doing your research, and even being willing to jump ship if a new and better offer shows up outside your current broker service.