My Experience Using E*TRADE – Leaving the Robo Advisors Behind

As the saying goes, it's easier to give advice than to actually follow it. As I write financial content, providing advice on ways to get out of debt and save money, I hate to admit that for the longest time I was still too intimidated by the stock market to invest. My investments were simply my 401(k), my IRA, and my company stock options that all sat in an account held by Fidelity because that is where my company put it.
The deeper I've delved into the content I've provided to you, the more I realized I needed to take the plunge. I decided to enroll in E*TRADE and begin investing in companies I believe in. I'm only 3 months in and yet I am hooked and I spend my days watching my account, reviewing companies I trust will grow, and investing more spare dollars than I ever thought I would.
This is my actual – unsponsored – review of using E*TRADE.
It's difficult not to know E*Trade. It's one of the very first platforms to make trading on the stock market easier for regular people who didn't spend hours on Wall Street and didn't want to work with stockbrokers. Although its very first trade began in 1983, it was in 1996 when it launched its online trading platform. Those who do have large bank accounts use E*TRADE but it became a platform to introduce newcomers like me to trading.
I didn't just enroll in E*TRADE. I also enrolled in Motley Fool's Stock Picks after I wrote this piece, Motley Fool's Stock Advisor Review (216% Gain Since March 2020). The numbers in that article are legit; the data comes from a coworker. And I was so wowed by what I saw (and wrote) that I decided if I was going to start investing, I'd like a little help. And, once again, I wasn't sponsored to do it.

How my E*TRADE picks are performing

My own stock pick: Moderna (TICKER: MRNA) because we were on the verge of approval for Covid vaccines and I was ready to dive in. I paid $143.68 for my stock. At this writing, it is $179.34.
My own stock pick: Space (TICKER: SPCE) because I have faith rockets will be taking people into a new atmosphere and buying low now could pay big later (value investing). I paid $28 for my stock. At this writing, it is 52.39 – more than double.
I followed the advice of the Motley Fool:
The Motley Fool stock pick CrowdStrike (TICKER: CRWD) was the Pick of the Month in June and July 2020. I wished I had heard of Motley Fool earlier when it was $94.84 in June because today, 8 months later, it is $231.35.
Motley Fool also recommended low-value stocks Pinterest (PINS) and Upwork (UPWK) at $70.94 and $35.375, respectively. Today they are at $81.12 and $53.23, respectively.
As you can see, I was sampling slowly and trying not to spend too much. Within a month, I dove back in with some stocks along 5G lines, my own picks based on Motley Fool articles offered to its members that discussed how 5G will grow in coming years. I took the suggestions I saw and used my E*Trade account's tools to research and review the stocks, looking at how the stocks have progressed over the last year and reading articles and research provided based on the search by the stock ticker. When I jumped in on one, it was $148.91 and it's only moved a little bit but I'm considering it a slow-growth investment.
While I regret that I didn't trust Motley Fool even more and buy more of CRWD because of how high it has climbed, I'm really happy with my results thus far. I may be using "chump change" to most investors but let's be realistic: Many of us don't have the big dough to "play the stock market." I may not have experienced a windfall in my first 3 months but what I have experienced is a 26% growth in my investment.
Tell me where have you ever had that high of a return on your savings? Certainly not from a bank savings account or money market account — my growth is 26x what I would have if it were sitting in a high-yield bank account.

E*TRADE Features

So, what am I getting with E*TRADE?
A brokerage account, of course. I don't need a stock market to buy or sell my stocks. E*TRADE's online brokerage does it all for me in mere minutes. It's free for stocks and ETFs (exchange-traded funds) with commission-free trades. Pricing for other trades is .50 to .65 transaction fee for Options trades, $1.00 per transaction for Bonds, and $1.50 for Futures.
Investment basics. Using the free tools under E*TRADE's Knowledge section, I could learn the basics of investing and see how aggressive I should be. There is advanced training for when I'm ready for it, as well.
Retirement planning. I may have signed up so I could learn to trade but the funny thing about making some money and seeing a high rate of return is that it makes you want to find other areas and ways to grow your retirement stash. E*TRADE gives me a realistic look and shows me what to aim for.
Market information. I can watch the Market on The Motley Fool but E*TRADE has it for me, which means I get two sets of streaming news and analysis to compare. (You always want a second opinion, right?) E*TRADE offers independent research TipRanks, Thompson Reuters, and others along with real-time quotes, news, charts, and daily market commentary.
Mobile app. And everything I can do on my desktop I can do on my iOs using the app that works just as fast and easy. (The app is available for Android, too.)
Again, I'm a newbie so while there are several bells and whistles to come, like Power E*TRADE and E*TRADE Capital Management, I'm nowhere near ready for those trading tools. Instead, I like the basic tools, such as
  • Analyst Research. If I do a bit of research on a company, I can visit its page and see what analysts think about investing in the stock.
  • Five years of history. I can examine a stock by its daily, 5-day, 1-month, annual, year-to-date, and 5-year history. I'm not ready to buy and sell fast. I'm in this Warren Buffet style: I want to buy low and have the patience to watch it grow over years.
  • Watch lists. I can put stocks I'm not yet willing to pull the trigger on into a watch list and keep an eye on my favorite stocks.
  • An endless supply of charts and graphs. I'm a visual person. Don't just give me numbers, show me how the numbers look. Anything I want to see in any way I can on E*TRADE web so I can do much of my research right on the web platform without having to scour other sources.

How To Set up an E*Trade Account

It takes less than 10 minutes to enroll for a free account with E*TRADE (and another few seconds to download the E*TRADE mobile app). That's it. You don't need to fund your account until you are ready and can do so by adding your bank account for transfers. (E*TRADE Bank offers bank services if you want to unite your accounts.) When you are ready to make your first purchases, fund your trading account balance and click on Buy.
You'll have options on how you want to buy (read Understanding the Stock Market – Making Heads or Tails of all the Numbers to understand the terms) and voila! You have invested in stock.


Why pick E\*TRADE over platforms like Robinhood?
Robinhood and other new platforms are built to make it easy for us to invest when we are first-timers. These operate mainly as robo-advisors, which means you put your money into an account and they invest it for you. They work in that you can oftentimes buy fractions of a stock if you cannot afford the stocks you want, says Amazon. I looked into these trade platforms and decided I didn't want someone else doing the work, let alone an algorithm. I wanted to learn and be an active trader. TD Ameritrade works like E\*TRADE and you can give that a try, too.
What happens if I need help or advice?
E\*TRADE may be a great online platform but it is a full-service brokerage company. If you need investment advice, you can select different platforms (that will cost you) for as much help as you'd like, including dedicated online brokers. But even with simple questions on the free platform, help is just a phone call away. E\*TRADE also has 30 locations for in-person offerings. While that's not a lot, it's more than online-only platforms.
Is it safe?
E\*TRADE is a member of the Securities Investor Protection Corporation (SIPC) and Federal Deposit Insurance Corporation (FDIC). Now this means your money is insured but it doesn't mean you won't lose money. This is the stock market and it's a risky place to put your money. While you can get higher returns, there is the chance your stocks go down lower than you can handle and that you could lose money. But logging into E\*TRADE every day and staying on top of your stocks and knowing when to sell can help minimize your losses.

What do I think of Motley Fool?

I'll start with the bad news. Signing up for Motley Fool means I get bombarded with emails for offers. I really hate how many emails I get trying to sell me something. However, the good thing about Motley Fool is once a week I get an email that really is a good one. It's the weekly picks offered to me via the founders of Motley Fool.
In 2020, its best monthly picks gained between 13.4% and 888.3% – yes, 888.3%! Six months had picks that earned over 100% growth.
The Motley Fool Stock Picks really help give me some ideas.

The bottom line

Sure, I'm writing for a financial website but I volunteered to write about E*TRADE because in just 3 months it has helped open new doors for my personal finances. I've been learning so much and get excited by taking control of my money rather than just parking it somewhere and forgetting about it. Knock on wood my 26% return on investment continues beyond 3 months – if it grows 26% every 3 months, in less than a year I may just double my investment. Far-fetched? Maybe. But I'll update you as I go.

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