Today when I visited my brokerage site, because my stock options had a sudden rise in price, I saw an absurd advertisement.
“Open an IRA, Get up to $600: 60 days of free trades with $10K or more”
What an absurdity! First of all, how much can a single $600 contribute to my retirement plans? You may say every nickel counts, but this is purely meant to pull us on board to someone that is salivating to collect mutual fund fees and brokerage fees from us for years to come.
The part about 60 free trades is a bit ridiculous as well. If I had $1 million and wanted to invest that in ten different blue chip stocks, it would amount to…drum roll…ten trades. I shouldn’t be chomping to do gobs of trades. But that’s where brokerage houses make their money. They want us to become day traders, something that has historically failed to build wealth.
According to one article, 4 out of 5 people lose money day trading, and only 1 in 100 do it well enough to generate a predictable profit. Google the failure of day trading yourself to understand why buying and selling is unhealthy for your bottom line.
Bottom line: your goal should be to rack up over $1 million in assets, because that’s what you need to yield a decent cash flow. What is $600 compared to $1 million? Not enough to be the big factor in your decision for a brokerage.
You should look for costs, features, and the means to manage your portfolio. There are services that let you invest on a monthly basis for free. They don’t have the best websites nor do they have the slickest way to look at your portfolio. But they may afford you the best way to grow your holdings in solid blue chip stocks. THAT should be what drives your decisions, not a few nickels.