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We put our money on the line and traded with eight Web brokerages. Here are the best...no bull.
Point, click, trade--these three little words sum up the allure of online stockbrokers. Using nothing more than an Internet connection and an account with an online broker, you can buy and sell shares of stocks and mutual funds with mere keystrokes. No waiting to place an order with a brokerage house, no high commissions gobbling up big pieces of your nest egg.
Little wonder, then, that 6 million plucky investors have already exchanged the security of traditional brick-and-mortar brokerage houses for the promise of cheap, fast online transactions and reams of late-breaking information about the hottest properties on the market. But is the trade-off worth it?
Undercover Traders
Posing as ordinary investors, we opened accounts with eight online brokers: market leaders Ameritrade, Charles Schwab, Datek, DLJdirect, E-Trade, and Waterhouse, as well as promising upstarts Discover Brokerage Direct and Suretrade. At each site, we tested how easy it is to open an account, place a stock trade, and get help. We pestered each firm's customer service department via e-mail and by telephone, both while the market was open and when it was closed. We also gauged the site's ease of navigation and the usefulness of its stock research tools.
We discovered that no broker has it all. Your choice will depend on what's important to you. If you need a little hand-holding, you'll want a firm that excels at customer service. If you want fast, no- nonsense stock trades, look for a broker that caters to frequent traders. And if you crave the cheapest trading, be prepared to wing it when it comes to getting answers to your questions. Check out ("http://www.pcworld.com/current_issue/article/0,1212,9078+3+0,00.htm l") "What Kind of Broker Is Right for You?" for our recommendations based on four different investment strategies--one of which is probably yours.
Going for Broker
If you think you can start trading as soon as you finish this article, think again. While some brokers, like DLJdirect and Suretrade, don't require a minimum deposit to open an account, most want at least $2000, and they don't take plastic. Allow at least five business days for your check to arrive and clear before your account gets...