Charles Schwab

What is the difference between luck and a miracle? If my stocks are down, that's luck; if my stocks are up-that's a miracle.

I would not call Charles Schwab (aka: schwab.com) a miracle, but I would call it reliable. Charles Schwab has been my broker since 1989, and I have been trading stocks online with them since 2000.

The main reason why I have stuck with Schwab for so long is their outstanding customer service. They have always been on top of every concern or question I have ever had. They very seldom make mistakes, but when they do, they are quick to make things right.

On one occasion, they forgot to credit my account for around $400. When I pointed this out, I not only received the credit and an apology, Schwab also rebated the commission I had paid.

Schwab's brokerage contract or customer agreement is the best I have seen in the brokerage business. There are no clauses, for example, that allow them to trade stocks in your account without your permission, except if you experience a margin call (your account has insufficient funds to cover the money you borrowed to trade shares of stock). Even then, they make a diligent effort to notify you of their intent to liquidate some or all of your holdings to cover the margin.

Some other brokerage firms have agreements that are egregious. To do business with them, you must agree to allow them to do whatever they want to your account. Just give them a signed blank check and call it a day-it will be easier on your nerves.

Schwab.com

When you go to schwab.com, you will notice that their web address has a "https" in it. That signifies that the web site uses a secure server. That is good news, because it means that computer hackers cannot easily infiltrate your brokerage account. Knock on wood. In the six years I have been trading at this web site, no hackers have given me any trouble.

You log into your account with your username and password. My username and password is...whoops! Never mind. I almost slipped up there. Once you are logged in you have several menu tabs and services to choose from. And heeeeeeeere they are!

Services Offered.

At Schwab you can trade stocks, options, bonds and mutual funds. They have banking services like checking accounts, check cards and CDs. I almost exclusively trade stocks and have a checking account. I also prefer to make my own trades and investment decisions. Schwab makes all of that possible.

Schwab also offers investment advice if you feel uncomfortable making your own investment decisions.

You can also trade stocks, bonds, mutual funds, etc. the old fashion way: by telephone. Their telephone service is a god send during those times my computer crashes, and I need to sell! sell! sell!

Commissions

Since I handle my own investment decisions, and trade frequently on the internet, Schwab charges me around $10 per trade. The cost of the commissions can vary depending on whether you trade frequently or infrequently; whether you trade by telephone or on the internet; or whether you let Schwab make your investment decisions for you.

Order Execution

Schwab almost always gets me in or out of a stock at the best price available. That is why I stick with Schwab even though other firms have lower commission rates. Those lower rates mean nothing if you pay too much for your stocks or receive too little when you sell them.

Quotes and Research

The quotes I get for the most part are timely and accurate. Occasionally Schwab's numbers are off, and I have to contact a representative to verify the quote. For example, I found a stock that allegedly paid a 15% dividend. But when I went to the order page, the quote there showed that the dividend payment would only be 8%. So I had to email Schwab and do some number crunching to figure out what the dividend payment actually was.

The research section of Schwab's site is one of my favorite spots in the universe! There you can find out the relative performance of each stock and stock sector as well as the overall performances of the major stock indices.

You can see how each stock has performed over the last month, three months, six months, 12 months, three years, five years or ten years. You can find out each stock's market cap, PE ratio, PS ratio, PEG ratio and dividend yield. You can click another tab to get any stock's profit margin, return on equity, debt to equity, and earnings per share growth.

One of my favorite features is the chart that you can program to draw the price performances of several stocks at once. You can then compare them and choose the best performers. The chart also allows you to include things like trading volume and moving averages so you can time your trades.

Caveat: Stock trading/investing is risky and none of the services, information and features you will find at schwab.com will guarantee success.

Account Records

Schwab does an excellent job keeping track of all the transactions I have made. When it is time to do my taxes, I can simply click my account's History tab to get all the information I need. Schwab also keeps a record of all my monthly account statements. I can download any or all of them as needed.

What Bugs Me Most

I think the one thing that bugs me the most about schwab.com is how slowly their web pages load. By the time a page loads, the cable guy will have finally shown up and installed cable in my house. However, I am still using a dial-up modem. If you use a DSL or cable modem, the pages should load faster.

Where the Money Is

My overall impression of Charles Schwab and Company is they are not perfect, but their customer service definitely makes up for this fact. Their commissions are not the lowest, but they are competitive. The customer service agreement is fair and not egregious. The research tools at their web site are outstanding and have helped me make decisions that are more informed. They almost always get me in and out of a stock at the best available price.

Unless they do something really stupid, I am going to continue to bet my money on Charles Schwab.