Stocks and Trading Thread - Channeling your inner Mono

[Admiral Yi]

My brokerage is not holding my money, they're maintaining a record of what stocks I own.

Well, they are holding a little bit of money in my sweep account, but that is an FDIC insured deposit.

In order to get my money they would have to pretend to buy stocks that they didn't, then run off with the money.

[Monoriu]

My brokerage is not holding my money, they're maintaining a record of what stocks I own.

Well, they are holding a little bit of money in my sweep account, but that is an FDIC insured deposit.

In order to get my money they would have to pretend to buy stocks that they didn't, then run off with the money.

I am not talking about the money.  I mean your stocks.  In HK, the stocks are normally held in "nominee accounts".  I don't directly own my stocks.  They are actually held in my bank's name.  My name doesn't even appear on the company's register or whatever it is called.  The voting rights and dividends first go to the bank, which then passes them to me.  In the event that the bank fails, I won't be able to get my stocks back.  In theory it is possible to get an actual stock certificate and put my name on it, and a lot of people have done that.  The downside is that it takes a few days if I want to sell it.  If I hold it in nominee accounts, I can sell them with a few clicks.

I have no idea how it works in the US.

[Admiral Yi]

We do it differently. 

For one thing, I'm constantly getting notifications of annual meetings and proxy votes.

[Monoriu]

I have thought long and hard whether I should trade using a bank, or open an online account with a brokerage firm.  The main advantage of a brokerage firm is lower fees.  Banks charge 0.25% on each trade.  The brokerage firms have lower fees, sometimes below 0.1%.  Brokerage firms also offer more options, like derivatives trading, full service brokers, and are, hmm, more willing to flexibly interpret the rules.  Banks however have much better IT systems and administration.  Their websites really link directly to their data centres, and are reliable.  The brokerage firms often don't really have automated account operations.  Their "websites" are often just fronts, with humans doing the fund transfers and operations behind.  So they tend to screw up and make mistakes.  Deposit 2k and the account shows 1k, that sort of thing. 

But the critical consideration for me is that HSBC is not going to fail.  The HK government won't let a bank that contains more than half of HK's retail deposits fail.  But brokerages do fail, and has happened many times before.  When that happens, the stock owners typically don't get much back. 

[Admiral Yi]

Hey Mono, have you ever thought about using a brokerage instead of a bank?

[Monoriu]

Hey Mono, have you ever thought about using a brokerage instead of a bank?

Already answered above.  Actually I did use a brokerage at one point.  The fees were lower, but that's about the only advantage.  Not interested in derivatives or human brokers.  It was a pain transferring funds between the bank and the brokerage, and they often screwed up basic account operations (though they did fix them).  But the biggest issue for me was that I could no longer take it psychologically.  After seeing brokerage after brokerage fail or stole assets from their customers, and countless investors losing their life's savings, ending up protesting on the streets but getting a "buyer beware" response from the government, I decided that the risk with brokerages was too great. 

[Admiral Yi]

I thought you were being a little repetitively redundant.

[Alcibiades]

Definitely use a brokerage....e-trade actually.

Can you not just enter your stock information/numbers/value into google finance and track it there?   I put all that info into google finance and check that frequently and just hop onto my brokerage website once a month or so to verify. 

[Monoriu]

Definitely use a brokerage....e-trade actually.

Can you not just enter your stock information/numbers/value into google finance and track it there?   I put all that info into google finance and check that frequently and just hop onto my brokerage website once a month or so to verify.

I basically pretend that Google does not exist - I use Yahoo search.  Just checked, Google finance requires registration.

[MadImmortalMan]

Yahoo has a very good finance section too.

[Monoriu]

Yahoo has a very good finance section too.

I will check it out

[Ed Anger]

I just mash buttons to pick stocks.

[Monoriu]

I just mash buttons to pick stocks.

That's probably no different than what the fund managers do anyway. 

[Caliga]

Yahoo has a very good finance section too.

Yeah, that's the only thing on Yahoo I use anymore.

[Admiral Yi]

Enornoc, a company I bought shares in as a long term venture type play, got a 25% bump from an announcement they were partnering with Tesla on battery something something. 

That bump was on a price that had been seriously tanking however.