Expert: Paul Henneman - 2/17/2008

Question
Novice wants to set up low-cost investing

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I'd like to start investing, but have no idea how to actually to it.

I'd like to find out about how to begin investing small amounts of money on a
monthly or quarterly basis in a single account somewhere that would let me
buy/sell no load mutual funds and stocks (preferably, I'd like to be able to
own funds and shares from non-U.S. companies, also).

Is it possible to set up one online account through which to buy/sell both no-
load funds and individual stocks?

My priorities are:

1. convenience (all trades on one statement), and

2. lowest possible fees (for buying/selling, etc.).

A bonus would be the ability to hold money in foreign currencies, but that's
not essential.

Can you give me any suggestions on how best to do this?

I know there have got to be some pretty important do's and don't's about this,
and some really good and really bad places (web sites, investment companies,
etc.) to get this all set up. I'm hoping to avoid making any really big mistakes
in getting my first investment account started.

Thanks, in advance, very much.

Answer
Chris,
   Thank you for your question!

Yes, there are numerous online trading services that you could easily set up an account to achieve what you are looking to do. Some of the better ones in my opinion are www.FOLIOfn.com (VERY low fees), www.Scottrade.com for relatively low fees but better service.  www.TDAmeritrade.com does a great job in terms of service, and functionality on their website, but charges slighly higher fees.

There are some other things that you should consider. If you are looking at these investments as retirement accounts, I strongly urge you to consider setting up your trading account as either an IRA or ROTH IRA account. There are huge tax advantages to this, as long as you do not plan to access the funds until you are 59 and 1/2 years of age. If you need the funds before then, there are significant penalties.

I would urge you to pick up a copy of "Investing for Dummies". It is available at most major bookstores, and of course online at www.Amazon.com .  While the title is not exactly flattering, it does give you a good foundation of knowledge on most major forms of investing. More importantly, it reviews the different account types, including IRA and ROTH IRA.  It is simple to set up one of these types of accounts if you decide to go this way, during your registration process to set up your account for the online trading account you will have the option to select what type of account. The services I mention above all have help lines to call if you have any questions.

I congratulate you on thinking about your financial well being, and I urge you to pick up that book and consider the tax advantages of an IRA or ROTH IRA account in which you could buy and sell stocks and mutual funds.  I hope that this gets you started, please do not hesitate to follow up with me if I can be of any additional service.

Sincerely,
Paul Henneman
President
ValuEngine Inc
www.ValuEngine.com