Competition Against Online Brokers Cut Down Commissions

By Wille Smithe

There's much to learn about the net brokerage industry. Unfortunately, many investors learn this the hard way.

With so many options available, choosing the right broker is as crucial as making the right investment.

For a long while financiers were used to paying $9.95 or higher per trade primarily based on their account equity or trade activity. Nonetheless those days have come to an end.

When evaluating brokers, keep these elements in mind:

* How snappy can the broker execute my trade?

* What type of technology does the broker use?

* What level of customer service does the broker provide?

* How much will the broker charge me per trade?

The extremely competitive nature of the new online trading industry has led straight to lower commission rates for all investors. While well known brokers such as Ameritrade or ETrade are still charging around $10 per trade, smaller firms can charge less than $3.

If you think choosing the right investments is complicated, you're not alone. Investors looking for simplicity and portfolio diversification are driving demand for all-in-one investment options.

According to Strategic Insights, a market research firm serving the mutual fund industry, more than two-thirds of the $150 billion that investors added to mutual funds in 2004 landed in asset allocation products.

So what exactly are these all-in-one investments? In a nutshell, they are broadly diversified, professionally managed funds that can serve as a complete portfolio.

Investors willing to look outside the industry figures may also find that smaller brokers, for example RushTrade, have more to offer in other areas, including client service, order routing and trading technology.

RushTrade has made a name for itself as a leader among internet brokers when talking of fast, trustworthy trading and client service. With the rise in competition among internet agents, RushTrade has structured its commissions to draw in each sort of investor.

About the Author:

We have written a bunch of articles on Market Timing Facts And How They Tend To Affect Speculatorsand have them all posted at Timing Signal where you will find them.