Category: Finance

This is an e-mail I wrote to my Auntie P when she asked me about what broker I use . . .

I had been using Vanguard which charged $20 per trade, but I thought that was pretty reasonable. Then they wanted to start charging a yearly fee plus increase the per trade costs so I went elsewhere. I considered E-Trade and Ameritrade, then tried Muriel Siebert but I wound up with Scottrade (Siebert’s web site didn’t work through my work’s firewall so I would have to pay extra to make phone trades or limit orders). They have very good customer satisfaction reviews (they always talk about winning the J.D. Power award four years in a row or whatever) and they are also really cheap. Online market orders are $7 and limit orders are $12. They also have local offices though I’ve never been. They don’t have minimum balances or fees for closing out your account. I’ve had them for about 9 months.

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I was talking with a guy at work who had just refinanced after buying a house a year ago. The rate he got was only 1% less than his previous but the lender paid all the closing costs. I said I was happy with my 6% rate, but he pointed out that it costs nothing to save $100 a month. Would you turn someone down who wanted to give you $100 a month.

So I’m refinancing. It will cost me nothing and my payment would be less. My broker even said that if I was worried about stretching the payoff date out 15 years again that I could just pay the 13-year amount every month and still be paying less than now and pay it off the same month in 2016.

I was reading some information from a CBS Marketwatch columnist named Paul Merriman. He writes about mutual funds and generally likes Fidelity and Vanguard funds and so do I. His advice is usually good without getting too technical. Anyway he recommended to one writer that they try a simple market-timing technique if they’re tired of being beaten over the head with bad returns but don’t want to miss out on bull markets either. I’ve always thought timing was crazy and that it couldn’t be done. But it started to make sense . . .

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