A Beginner's Guide To Investing With E-Trade

Investing can be a daunting task for beginners, but E*TRADE from Morgan Stanley makes it easy to get started. With a range of investment choices, easy-to-use tools, and free research, you can take control of your investments online. The first step is to choose the type of account you want and fund it. E*TRADE offers various accounts, including brokerage accounts, retirement accounts, and small business retirement accounts. You can then use their online tools to develop an investment plan based on understanding risk and reward, choosing the right investments, rebalancing, and sticking to your plan. E*TRADE provides a large selection of investment choices, such as stocks, exchange-traded funds (ETFs), mutual funds, bonds, and options. You can use their tools and screeners to narrow down the options and find investments that match your plan and criteria. With E*TRADE, you can also execute trades, monitor your accounts and assets, and keep track of market performance. So, whether you're a beginner or an expert, E*TRADE has the resources to help you invest with confidence.

Choose an account type: brokerage, retirement, or small business retirement

When choosing an account type on E*TRADE, you have three options: brokerage, retirement, or small business retirement. Each account type offers different benefits and features, catering to diverse financial goals and needs. Here's a detailed overview of each account type:

Brokerage Accounts:

Brokerage accounts are a popular choice for those seeking flexibility and control in their investments. With a brokerage account on E*TRADE, you can establish a standard brokerage account or explore other options such as a Coverdell Education Savings Account or a custodial account for minors. These accounts provide easy access to a wide range of investment choices, including stocks, exchange-traded funds (ETFs), mutual funds, bonds, and options. One notable advantage of brokerage accounts is their liquidity, allowing you to buy and sell various financial instruments with ease. Additionally, brokerage accounts often have fewer restrictions compared to retirement accounts, providing more freedom in managing your investments.

Retirement Accounts:

Retirement accounts offered by E*TRADE include traditional IRA, Roth IRA, and rollover IRA options. These accounts are specifically designed to help you save for retirement and offer potential tax advantages. With a traditional IRA, you may be able to deduct your contributions from your taxable income, while a Roth IRA allows tax-free growth of your savings, although contributions are typically made with after-tax money. A rollover IRA is useful if you want to consolidate your retirement savings by transferring funds from an old 401(k) plan or another retirement account.

Small Business Retirement Accounts:

Small business retirement accounts are tailored for self-employed individuals and small business owners and employees. These accounts offer tax advantages and help you plan for retirement outside of a traditional employer-sponsored plan. Account types include Individual or Roth Individual 401(k), Simple IRA, SEP IRA, and Investment-Only Account. Small business retirement accounts provide flexibility and control over your retirement savings, ensuring that you can build a comfortable financial future even if you don't have access to a traditional company retirement plan.

When choosing an account type on E*TRADE, it's important to consider your financial objectives, time horizon, and tax implications. Each account type serves a different purpose, so understanding your specific needs will help you make an informed decision.

Fund your account via transfer or rollover

Funding your E*TRADE account can be done in several ways, including transfer or rollover. Here is a detailed guide on how to do it:

Transfer Money

Transfer Money is a free service provided by E*TRADE that allows users to move money between their E*TRADE accounts and from external financial institutions. It typically takes up to three business days for the transfer to be completed. To use this service, simply select the appropriate accounts for transferring funds, enter the desired amount, and choose the date you want the transfer to occur. You can also set up recurring transfers if needed. This method is a convenient and secure way to fund your E*TRADE account.

Wire Transfer

A wire transfer is an electronic transfer of funds between accounts, and it can be used to move money to your E*TRADE brokerage account from another financial institution. To initiate a wire transfer, you need to complete and submit the E*TRADE Wire Transfer Form to your financial institution, along with other relevant information such as the receiving institution details and your E*TRADE account number. Wire transfers are typically faster and more secure than traditional transfer methods.

Transfer an Account

This option is specifically for transferring all your assets, including cash and securities, from an external financial institution to E*TRADE. This process can take 10 or more business days. To initiate the transfer, you can use the online Transfer an Account feature, which will guide you through the necessary steps. Alternatively, you can complete and mail the Account Transfer Form to the provided address. This method simplifies your finances by consolidating your assets under the value, tools, and guidance offered by E*TRADE.

Rollover IRA

If you have an old 401(k) or 403(b) plan, you can consider rolling over those assets into an E*TRADE Rollover IRA. This allows you to manage all your retirement assets in one place and take advantage of investment flexibility, low costs, and tax benefits. The process involves opening an E*TRADE Rollover IRA account (unless you already have an E*TRADE IRA) and contacting your former plan administrator to initiate the rollover. You may need to fill out forms and provide specific instructions for the check issuance. The rollover process typically takes 4-6 weeks, depending on the former employer's processing time.

Develop an investment plan using E*TRADE's online tools

E*TRADE offers a range of online tools and resources to help you develop an investment plan. Here are some steps you can take to leverage these tools effectively:

• Understanding Risk and Reward: ETRADE provides educational resources to help you understand the concept of risk and reward in investing. By grasping this fundamental principle, you can make more informed decisions about allocating your capital.
• Asset Allocation: Utilize ETRADE's tools to determine how to allocate your assets within your portfolio, such as stocks, bonds, and cash. This can help you diversify your investments and potentially maximize returns while managing risk.
• Market Research and News: Stay informed about market news and individual stock performance. ETRADE offers various tools, including watch lists, alerts, and market news, to help you track the performance of specific stocks and sectors. This information can guide your investment decisions.
• Investment Screeners: ETRADE provides investment screeners that allow you to narrow down potential investments based on your criteria. You can set specific parameters, such as industry, market capitalization, or other financial metrics, to find investments that align with your plan.
• Diversification: ETRADE's tools can help you build a diversified portfolio. Consider investing in exchange-traded funds (ETFs) or mutual funds, which offer built-in diversification by pooling various assets. This can reduce the impact of losses from a single company or industry.
• Retirement Planning: If you are investing for retirement, ETRADE offers tools to help you build a retirement plan. This includes resources for different types of retirement accounts, such as IRAs and 401(k)s, to ensure your investments align with your long-term goals.

By utilizing E*TRADE's online tools and resources, you can develop a well-informed investment plan that considers your risk tolerance, financial goals, and time horizon. These tools empower you to make educated decisions and take control of your investment journey.

Research and find investment ideas

E*TRADE offers a wide range of investment options, including stocks, exchange-traded funds (ETFs), mutual funds, bonds, options, and other investment vehicles. The platform provides various tools and resources to help users make informed investment decisions. Here are some steps to research and find investment ideas on E*TRADE:

Utilise E*TRADE's Tools and Screeners

E*TRADE offers a variety of tools and screeners to help you narrow down the vast number of potential investments and find specific choices that align with your investment plan and criteria. These tools enable you to set parameters based on your investment goals, risk tolerance, and other factors, and then identify investments that match your preferences. For example, you can use stock, mutual fund, bond, and ETF screeners to generate investment ideas based on the criteria that are most important to you.

Access Market Data and Real-Time Information

E*TRADE provides users with access to real-time market data, including price quotes, customisable charts, and risk management tools. This allows you to dig deeper into individual stocks or funds and make more informed decisions. You can also set up watch lists to track the pricing, performance, and news related to specific investments or create sample portfolios to monitor their performance.

Leverage Free Independent Research

E*TRADE offers complimentary access to recommendations and ratings from independent analysts. This research can be a valuable resource for finding potential investments or comparing them with your own ideas. Take advantage of insights from TipRanks, Thomson Reuters, and other sources to fuel your investment decisions.

Explore Thematic Investing

E*TRADE allows you to align your investments with your values and economic, technological, or social trends. You can explore various themes, such as diversity, equity, and inclusion, or focus on specific areas like climate sustainability, artificial intelligence, healthcare innovation, and more. This approach enables you to invest in areas that resonate with your interests and values.

Stay Informed with Market News and Commentary

Stay up to date with market news and commentary provided by the E*TRADE platform. Access multiple financial and business news sources, including live Bloomberg TV, to keep abreast of the latest developments and make informed investment decisions. Additionally, take advantage of exclusive market and active trader commentary to enhance your understanding of current trends.

Execute your trades using the E*TRADE trading ticket

Once you've done your research and are ready to make a trade, you can use the E*TRADE online trading ticket to enter your orders. The E*TRADE trading ticket provides a variety of order types, and your portfolio updates in real-time, so you can immediately see the effect of your trades or market changes.

There are several options to choose from when placing a trade. Here are some of the more common selections:

• Market: This type of order is for buying or selling a security, such as a stock, and it will be executed immediately at the best price currently available on the market.
• Limit: A limit order buys a stock at or below a specific price, or sells a stock at or above a target price. This order is only executed if you get your desired price or better.
• Stop: This is for selling a security, such as a stock, if its price falls past a specified point. This is used to limit losses or lock in profits.
• Good for Day: This specifies that the order will only remain in effect for one day, or until it is fully executed or cancelled.
• All-or-None: This order must buy or sell the full quantity of shares specified in a single transaction, or it won't execute at all.

You can also place trades using the E*TRADE app for iOS and Android, which supports basic trades, advanced order types, and even multi-leg options orders. The Power E*TRADE app is another option, which is an intuitive and innovative mobile platform for traders of all kinds.

Frequently asked questions