E-Investing: How to Choose and Use a Discount Broker

by Rob Carrick; Guy J. Anderson

• ISBN13: 9780471645207
• ISBN10: 0471645206
• Format: Paperback
• Copyright: 2000-08-01
• Publisher: WILEY

Summary

More and more Canadians are turning to discount brokers as a low-cost alternative to having professionals manage their money, making the discount brokerage industry one of the fastest-growing segments of the investment world.On-line investing is cheap and easy, an dyou can set up an account with most discount brokers with just a few dollars. But thousands of Canadians with accounts at discounters have no idea on how to make them work effectively. E-Investing How to Choose and Use a Discount Broker is your manual for on-line investing. Rates the strengths and weaknesses of all the discount brokers in Canada, including cost and service comparisons, and ease of use of discounters' websites. Features a questionnaire to help you decide if a discounter is right for you. Explains how to do business with a discounter, whether it's face-to-face, on the telephone, or via the Internet. Gives step-by-step instructions on how to set up an account and how to get on-line. Walks you through sample trades step-by-step with dialogues and questions to guide you. Lists dozens of websites indispensable to the do-it-yourself investor. Explains how to access tools and resources that allow you to track daily market developments; get quotes, charts, and stock prices; and do research on mutual funds and stocks.

Author Biography

Rob Carrick writes a regular column on personal finance for <I>The Globe and Mail.</I> He has worked as an investment reporter for <I>The Globe and Mail, </I>and is a parliamentary reporter and senior economics writer at the Ottawa bureau of The Canadian Press. <P> Guy Anderson is a trader with a major Canadian discount brokerage. He currently holds designations as a Certified Financial Planner (CFP) and Canadian Investment Manager (CIM).

Table of Contents

Contents	v
Introduction	xi
What Exactly is a Discount Broker?	xiv
What's the History Behind Discount Brokers?	xv
A Word About CT Securities	xvii
Discounter Basics	1	(36)
Questionnaire: Is a Discount Broker Right for You?	3	(5)
How Do I Do Business With a Discount Broker?	8	(11)
Face-to-Face Contact	8	(6)
By Phone	14	(5)
How Much Can I Save With a Discounter?	19	(1)
What Other Differences Are there Between Discounters and Full-Service Brokers?	20	(5)
Advice	21	(1)
Responsibilities to the Client	21	(1)
Training	22	(1)
Research	22	(1)
Communication	23	(1)
Account Start-Up	23	(2)
What Are the Risks of Using a Discount Broker?	25	(2)
Investor Error	25	(1)
Market Risk	25	(1)
Brokerage Collapse	26	(1)
Financial Planning Basics for Discount Broker Clients	27	(1)
Get Your Priorities Straight	28	(2)
Investing Objectives	30	(1)
Investor, Know Thyself	31	(1)
Asset Allocation	31	(2)
Building a Portfolio	33	(1)
Web Resources for Learning More About General Investing	33	(4)
The Players	37	(12)
Web Resources for Comparing Discount Brokers	48	(1)
Getting Started	49	(28)
Step One: Pick the Kind of Account You Want	50	(17)
The Cash Account	50	(1)
The Margin Account	50	(3)
Registered Accounts	53	(5)
Locked-In Accounts	58	(4)
Limited Accounts	62	(1)
Investment Club Accounts	63	(1)
Informal Trust Accounts	63	(1)
Estate Accounts	64	(1)
Premium Accounts	64	(2)
Corporate/Non-Personal Accounts	66	(1)
Step Two: Getting an Application Form	67	(1)
Step Three: Filling Out the Form	68	(7)
Details to Watch	71	(2)
Other Forms	73	(1)
Rejections?	74	(1)
Step Four: On-Line Set-Up	75	(1)
Step Five: Putting Cash in Your Account	75	(2)
Getting On-line	77	(16)
Your Computer	77	(1)
Your Browser	78	(1)
Your Internet Service Provider (ISP)	79	(1)
Discount Broker Web Sites	80	(5)
Complaints About On-Line Trading	85	(3)
Avoiding Trouble/Troubleshooting	88	(1)
Security	89	(2)
Oddities	91	(2)
Commissions and Fees	93	(42)
Commissions for Stock Trades	95	(26)
On-Line Trading	95	(6)
Telephone Trading	101	(20)
Commissions for Mutual Funds	121	(6)
Discounter Commissions and Fees for Mutual Funds	122	(5)
Commissions for Bonds	127	(1)
Commissions for Options	128	(7)
Buying Stocks Through a Discounter	135	(50)
Getting Ready to Place a Stock Trade	136	(18)
Step One: Be Sure of Which Shares You're Buying	136	(1)
Step Two: Get the Stock Symbol	137	(1)
Step Three: Decide How Much You Want to Buy or Sell	137	(1)
Step Four: Get a Quote	138	(3)
Step Five: Decide What Kind of an Order to Place	141	(6)
Step Six: Interpret the Quote	147	(1)
Step Seven: Decide How Long the Order Will be Good For	147	(2)
Step Eight: Decide How to Settle the Trade	149	(5)
Now You're Ready to Trade	154	(6)
Here's How to Do it On-Line	154	(1)
Here's How to Do it By Telephone	154	(3)
Here's How to Trade Using an Automated Phone Service	157	(3)
Some Sample Stock Trades	160	(1)
Buying Amazon.com on a Busy Nasdaq Day	160	(1)
Trying to Sell Nortel Networks in a Major Pullback for the Stock	160	(1)
Short Selling Corel.Corp.	160	(1)
Buying Trans Canada Pipelines in a Calm Market	161	(1)
From the Trenches: Common Trading Blunders	161	(3)
What Happens After You Place a Trade	164	(3)
Checking the Status of Your Order	164	(1)
Changing or Cancelling an Order	165	(1)
The Confirmation Slip	165	(2)
Basic Trading Strategies	167	(6)
Buy-and-Hold	167	(1)
Speculating/Active Trading	168	(1)
Day Trading (or Short-Term Holds)	169	(1)
Leverage/Margin	170	(2)
Dollar-Cost Averaging	172	(1)
Averaging Down	173	(1)
There's Trading and There's Over-Trading	173	(1)
And Then There's Obsessive Over-Trading	174	(2)
A Few Things You Should Know	176	(2)
Dividends	177	(1)
Stock Splits	177	(1)
Mergers, Takeovers and Reorganizations	177	(1)
Stock Markets	178	(3)
Key Canadian Indexes	178	(1)
Key US Indexes	179	(1)
Other Indexes	180	(1)
Stock Market Web Resources	181	(4)
Stock Exchanges	181	(1)
Daily Stock Market and Business New Updates	182	(3)
Buying Mutual Funds Through a Discount Broker	185	(8)
Getting Ready to Buy a Mutual Fund	187	(4)
Placing the Buy Order	188	(1)
Getting Help	189	(2)
Mutual Fund Web Sources	191	(2)
Buying Bonds Through a Discount Broker	193	(10)
Getting Ready	194	(5)
Placing the Buy Order	197	(2)
A Few Bond Tips for Discount Broker Clients	199	(2)
Laddering	199	(1)
Strip Bonds	200	(1)
Treasury Bills	200	(1)
Accrued Interest	201	(1)
Web Sources for Bond Investors	201	(2)
Options	203	(14)
Options Quotes	203	(3)
A Few Points for Options Traders to Consider	206	(1)
Options Basics for Disount Clients	207	(3)
What About Puts?	210	(1)
What are the Choices for Option Tradin?	211	(3)
Basic Option-Trading Strategy: Buy Calls and Invest the Difference	214	(1)
Combinations	215	(1)
Web Resources for Options Traders	216	(1)
Bells and Whistles	217	(22)
Extras Offered	217	(10)
Market Updates	218	(1)
Real-Time Quotes and Charts	218	(1)
News	218	(1)
Equity Research	219	(4)
Mutual Fund Research	223	(4)
Don't Miss These Free Bonuses For Discount Broker Clients	227	(3)
Newsletters	229	(1)
Initial Public Offerings (IPOs)	229	(1)
Dividend Reinvestment Plans (DRIPs)	230	(9)
DRIP-Related Web Sites	232	(1)
Foreign Markets	232	(2)
Banking Privileges	234	(1)
Share Ownership and Certificate Registration Fees	235	(1)
Alerts	236	(1)
Seminars	236	(1)
Giveaways, Cash and Other Promotional Stuff	237	(2)
On-line Learning and Research	239	(22)
How to Research a Stock on the Web	240	(8)
Nine Typical Questions	240	(6)
Supersites: One-Stop Stock Research for Discount Broker Clients	246	(2)
How to Screen Stocks on the Web	248	(4)
For Canadian Markets	248	(2)
For US Markets	250	(2)
How to Research a Mutual Fund on the Web	252	(2)
First, Separate the Good from the Bad and the Ugly	252	(1)
Then Narrow the List Down Further	252	(1)
Looking For Fresh Ideas	253	(1)
For Those Times When You Just Feel Like Surfing	254	(2)
For Keeping an Eye on Tech Stocks	256	(1)
Technical Analysis	257	(1)
Miscellaneous	257	(1)
Stock Market Games	258	(3)
Conclusion: The Future of Discounters	261	(4)
Index	265