So I was reading Benjamin Graham’s book The Intelligent Investor, and Warren Buffett was his protégé. Herein is where I first read about the two rules of investing:
- Don’t lose money.
- Don’t forget rule #1.
One of the ways to enforce the first rule is to reduce transaction costs. As of this writing, I now know of four ways to invest with zero transaction costs. I’m sure there are others. Briefly, here the one I know and/or use…
1. Vanguard
I used to model David Swenson’s asset allocation from the book Unconventional Success where he explains a well-diversified equity-centered portfolio.
However, I now use Dave Ramsey’s recommended asset allocation, because it is more aggressive, and I am playing catch-up. (Click here to read my article about asset allocation.)
In any event, personal investors can trade Vanguard ETFs with no commission. I do this in my Roth IRA, and their pie tool makes it easy to maintain the proper asset allocation.
2. Robinhood
TDAmeritrade.com was my first trading platform. I was actually with Scottrade which merged with TDAmeritrade.
Later, I learned about free trading via the Robinhood platform. The only thing I have purchased has been som GE stock (which is still on sale). But it was completely free, and you can trade the instant you transfer money.
This seems like a platform best for beginning investors.
3. M1 Finance
I just opened my account here. I just verified my micro deposits and deposited $100. Bothe the website and app have more bells and whistles than Robinhood.
The cool thing about M1 Finance, investors can buy partial shares of stocks. In fact, you can buy as little as 1/10,000 of a share. So if you don’t have $1000+ to plunk down to buy Google or Amazon, you can still invest with as little as $100 to start.
The other cool thing is that investors can answers a few questions about age, risk-tolerance, and so forth. M1 Finance will automatically craft you an asset allocation portfolio based on your answers. And they’ll automatically rebalance it periodically. This makes sure that you are buying low and selling high. Finally, you can set up regular deposit intervals for automatic investing. It’s kinda like having an automatic 401(k) mutual fund investment, except with stocks and ETFs.
The platform seems like it would be good for long-term investors who like automaticity and assistance selecting investments.
4. Webull
Webull is the the most recent free investing platform that I have learned about. I have not used it, so I know the least about it. I have only seen screen shots of what they offer. Like M1, they offer partial shares and dividend reinvestment.
This platform seems like it is intending to cater to active traders.
I got most of this information from a great new website call investingsimple.blog run my Ryan Scribner. Click here to check out his excellent YouTube Channel.