Online Discount Brokers

• If you are comfortable making your own investment decisions, you can save a lot of money by using an online discount broker instead of a traditional one. Once you open your account, you can simply go to the trading menu, enter the ticker symbols of the stocks you want to buy and place your orders. You can instantly see how much the trade will cost, including the cost of the shares themselves and your brokerage commission. You can even fund your account electronically by linking your personal bank account to your brokerage account.
  
  

Exchange Traded Funds

• Exchange-traded funds combine the benefits of mutual funds with the benefits of individual stocks, and they can provide an even lower-cost way to invest online. Some of the most widely used exchange-traded funds track the major stock market indexes, and some discount brokers now allow clients to buy those funds without paying a brokerage commission. That allows investors to reinvest their dividends and make automatic monthly investments without incurring any additional trading costs.
  
  

Mutual Funds

• You can invest online even if you prefer to use mutual funds instead of individual stocks. Most mutual fund companies now allow electronic exchanges between their funds, and many offer electronic redemptions and purchases as well. If you open your account online, you can set up your credentials at that time, then fund your new account electronically by entering the routing number and account number for your bank account. Once the account is open, you can log on, go to the trading menu and choose the funds you wish to buy and sell. That makes it easy to rebalance your portfolio as necessary and make any changes you wish.
  
  

Tax-Deferred Accounts

• Many employer-based retirement programs such as 401k and 403b plans now allow some some sort of electronic trading, even if the options are not as extensive as they are with brokerage and mutual fund accounts. Retirement plans often restrict trading to a few times a year, in order to keep their costs low for everyone. But while the trading window is open, you are free to log on to your 401k or 403b and move your money around as you wish. This gives you a chance to maintain a balanced portfolio or move to a more risk-averse position as you get closer to retirement.