Where can I start trading stocks and options with low expense ratios?

I am a college student with around $10,000 in savings. I earn around $1,000 per month. I want to start active trading as opposed to index and REIT's investing. Is active trading profitable at my saving level? If so, what is the best platform?

Investing, Starting Out
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September 2016

First, I applaud you for having $10,000 in savings and working while going to college. 

I am going to answer your questions directly first, because there are a few problems with what you are asking. Then, and I know you didn't ask, but I am going to give you my opinion on how to go about getting started with investing.

You said, "I want to start active trading as opposed to index and REIT's investing."  Here's the problem with that statement. "Active trading" is a strategy, and index funds and REITs are types of investments. They are not opposites. For example, you could "actively trade" an index and a publicly traded REIT if you wanted. However, I don't recommend you do that.

Q. "Is active trading profitable at my saving level?"

A.  Whether or not you are successful at trading is not determined by how much you have in savings. It does determine what type of trading you can do, but does not determine if you will be profitable. You may have meant, is active trading WISE at my savings level. I would have to say no on that question.

Q. "What is the best platform?" 

A. I do not know of a "best platform". There are many ways to open a brokerage account. You could open one with a financial advisor, or get a simple online account on your own.

The following is just my opinion, not a specific recommendation.

You are off to a good start. You have a nice amount of savings, and you are working your way through college.  I think you should continue with what you are doing.  Keep putting money in savings for when you get out of school.  Once you get your career started, raise your income, pay off debt (if you have any), then you can start thinking about investing.

Read this book by Benjamin Graham titled, The Intelligent Investor. Make sure to get the most recent edition.

Set a goal of investing 15% of your income into low cost index funds that fit your level of risk, and keep at it throughout your working life. You will likely have access to a 401(k), and I would use that platform to open an investment account.

Think long term, keep your investment costs low, invest on a regular basis, and work with a qualified advisor. In my experience, these are the things that will help you win at investing.

Thanks for the question, I hope this information helps you. Keep up the good work!

 

Wyatt A. Moerdyk, AIF®

Managing Member

Chief Compliance Officer

Accredited Investment Fiduciary®

Evidence Advisors Investment Management

Office: 210-591-1170

Email: wyatt@evidenceadvisors.com

Web: www.evidenceadvisors.com

Investment Advisory Services offered through Evidence Advisors, LLC, a registered investment advisor. Investopedia, LLC and Evidence Advisors, LLC are not affiliated.

 

 

 

 

 

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