One thing that has kept me from putting much money into indivdual stocks over the years was that I just too tight to pay the trading commissions. I know their are a lot of discount brokers out there now (E*Trade, Scottrade, TDAmeritrade, Schwab, etc., etc.) that have made it significantly cheaper by doing online trades but I still didn’t feel lilke paying $10 or so a trade when I could just pump money into a no load, low expense ratio, index mutual fund with no transaction costs (when buying directly from the fund family).
Several months ago though, I found a new online brokerage that offered up to 10 free trades a month as long as you had a total account balance of $2,500. Even if you didn’t meet the minimum balance requirement, trades were only $4.50, which is still cheaper than everyone else. The company is called Zecco which stands for Zerro Commissions and yes, they offer totally free trading!
So now that there was a free option available, I decided I would start doing a little trading with some play money that I just had sitting in my online savings account. Here it is several months later and I’ve really come to love my Zecco account and my 10 free trades a month. The stock market has been beaten up pretty bad so far in 2008 but since the trades are free, I can just buy a few shares of the stock I’m looking at for small dollar amounts.
From what I’ve read, Zecco’s interface may not be as pretty or offer as much analysis as some of the other discount brokers, but you just can’t beat free trades! So if your someone who wants to just dabble a little bit in the stock market but like me, don’t want to pay $10 or so for an online trades, I highly recommend checking out Zecco.
I still recommend that you place the bulk of your investments in low-cost index funds, such as a Target Retirement Fund from Vanguard. However, setting aside a little money for Zecco is a great way to play individual stocks without incurring large trading fees.
Questions or Comments about Zecco?
Just leave a comment and I’d be glad to talk with you about it.