Beginner Investing/Charles swab


I am a total beginner invester,  and have about $500 to invest.  I was considering Charles swab, then heard a few bad things on them. Can you give me your opinion?  Or should I do something else?



Thank you for your question!

Scwhab is fine, very comparable to the other discount brokerage firms online.  Others to consider would be Scottrade, Etrade, TDAmeritrade, Interactive Brokers.

These are all in expensive ways to open an investing account and buy some stocks. If you are just getting started, I would strongly urge you to read an introductory book such as "investing for dummies".  While not a flattering title, it will give you most of the basics you should know.

For example, how you set up the account is very important.  Retirement accounts such as ROTH Ira's and Ira's provide extremely valuable tax savings over time, but  have limits on how much you can invest into them. For example, if you are married and your combined income is less than about $160,000, a ROTH Ira account is excellent.  But you can contribute a maximum of $6,000 a year currently to that type of account, no more than that.  Also, there are very steep penalties if you withdraw funds before retirement age, so only do this if you are planning fo retirement and do not plan to take out any funds until then. When you go through the account opening process online at any of these brokerage firms, the type of account you want to set up will be one of the first questions.

The most important thing is to come up with a budget each month, and continue to contribute every month, even if it is a small amount.  The way returns compound over time means this will help grow your investments in the best way possible.

I  hope this helps, please do not hesitate to reply if I can offer anything additional.

Paul Henneman
ValuEngine Inc.

Beginner Investing

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Paul Henneman


I can answer any questions on investment strategies. Specifically, my expertise lies in long term investment strategies designed to beat market performance while reducing risk. Not get rich quick schemes, but solid investing strategies. DO NOT SEND ME YOUR HOME WORK QUESTIONS! Over one half of the questions I receive are clearly students in finance or economic classes asking for answers to their homework questions. Most of these come from India. I won't answer them, do your own work. However, I welcome all investors trying to negotiate how to invest in stocks, mutual funds, ETF's, and other investments.


15 years in a leadership role at a financial research company. We sell research to institutions such as Wells Fargo, Fidelity, Thomson Reuters, Bloomberg, Bank of NY, Scotia Bank, and others.

Florida International University, University of Florida

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