When I first started looking for an online broker, I wanted something cheap. I didn’t want to be paying a fortune in brokerage fees. My last broker was TD Waterhouse. Even though they were a discount broker, they were not cheap. And when they added annual fees, they got more expensive. I don’t even think I used them as an online broker, instead buying the stocks through the phone.
The first online broker I considered was ScotTrade. They advertised $7 trades. I even went so far to fill out an application. But then when I researching ScoutTrade, I found out they didn’t do dividend reinvestment. That was a must for whatever online broker I chose.
I had been reading Eight Steps to Seven Figures by Charles Carlson. He mentioned a company that he was involved with called BuyAndHold.com. They were an online broker. I checked into them, and found they worked quite a bit differently then what I was used to. They charge a monthly fee of $6.99, but you get 2 free window trades per month. Window trades after that cost only $2.99. Window trades? Windows trades are what I was talking about being different. They have 3 windows. 10-11am, 12:30-1:30pm, and 3-4pm. So I place an order, and the trade will take place sometime within the next window. So unlike a traditional online broker where I can make a buy or sell order instantly, with window trades I give up a small amount of control over the transaction price. But since I am not trading stocks, instead focusing on long term investing principles, this was not that important to me. A few cents difference this way or that does not make much difference when I am planning on hold a stock for a long time.
I was not familiar with BuyAndHold.com, when I had heard of ScotTrade. So I did lots of Google searches for any complaints about them, and found none. I found mention of them on reputable websites.
So I chose BuyAndHold.com as my online broker, and signed up for an account. I have used my free window trades most months. If they are there, I am encouraged to buy at least some shares of something. So I ended up at least investing some small amounts each month.
I have since signed up for a Roth IRA account with BuyAndHold. That works a little different. I don’t pay a monthly fee for the Roth IRA. The window trades are still only $2.99. There is an annual fee of $25, but they will wave that if you sign up for automatic monthly buys. I don’t do that as I am usually buying $1000 or $2000 worth of stock at a time within my Roth IRA. My Roth IRA throuch BuyAndHold.com is a self-directed IRA. I lucked into that as I did even knwo what a self-directed IRA was before I signed up for it. What that means is I can buy and sell stock within my Roth IRA. I don’t trade within my Roth IRA. Most of Roth IRA is invested in ETFs.
Anyway, that is how I came to be with BuyAndHold.com as my online broker. I am pretty happy with them.