Now that the stock market has dropped drastically over the last year, it’s actually a great time to buy. Remember this sage advice from the world’s most successful investor:

“We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.” – Warren Buffett

Looking at today’s market, many people are fearful – that should trigger the time to be greedy. You would be hard pressed to find someone who’s confident in today’s market, or who’s not apprehensive about what the market is doing. Ironically that is the perfect time to buy. Prices are down, people are on the fence and afraid to buy, and that means bargains are a plenty.

But how does the average Joe go about buying stocks?  If one hasn’t invested in stocks before, where should they look?  The first thing you’ll want to do to be able to buy stocks, is to choose a brokerage. Here’s five, everyday brokerages that have easy interfaces, low fees, and even some great trend and charting features.

Here’s a review of 5 of the most popular online brokerages and banks:

E-Trade. A long time staple in online investing, I think almost everyone has seen one of their commercials. Although after I did some research and dug around their site, I realized it’s a lot of overkill. I found it difficult to find important information on their site quickly because it was cluttered, and offered way too many options for what I was looking for.

• The Good:
  • Lots and lots of account types, and features. Including savings, trading, and retirement.
  • International Trading
  • Great interest rate
• The Bad:
  • Simply too many features and options for me. Personally I like a bank to handle my checking and savings accounts, and a brokerage to handle stock trading.
  • Complicated pricing on stock trades. I hate trying to figure out how much my trades will be based on how many I do and how much assets I have. Just make it simple please.

Zecco. Kind of the new kid on the block – they focus on trading only, and offer 10 free trades per month. I like their philosophy, but wonder if they have lasting power.

• The Good
  • Easy and focused website. They only do trading accounts, so there is no overkill on various other types of accounts.
  • First 10 trades per month are free – as long as your account has at least $2500 balance.
  • Offers international trading.
• The Bad
  • Doesn’t offer other accounts, such as checking and savings, if you’re looking for that.
  • They’ve only been around for roughly 2 years, and might not have the experience or solidity of someone like E-trade or ING.

ING Direct (Sharebuilder). All things considered, sharebuilder is a great site, and ING is a great bank to work with. I have a lot of friends who use them for their online checking account.

• The Good:
  • ING offers many account types (checking, savings, retirement, etc) but separates it’s investing site into sharebuilder.com. I like the separation, it gives me the feeling when I go to sharebuilder, that I’m not bombarded with all kinds of accounts.
  • Offer a nice automatic investing program, for $4 dollars commission, you can buy stocks automatically each month. I like this because if you buy automatically, you 1) forget about it while you’re wealth grows. 2) the average cost per share goes down because you buy more shares when the price is low, and less shares when the price is high.
  • No Account minimums.
  • I like their site. It’s simple, and offers only the essential information without feeling cluttered and bloated.
• The Bad:
  • $9.95 cost per trade, which is expensive compared to zecco.com’s $0.

HSBC is also an online bank, that offers trading as well. They have been in business for a while, and have proved to have lasting power. Although because they are a complete online bank, I found that they offered more than what I wanted in terms of just investing. I found it hard to find what I was looking for, because there was simple so much information on their site.

• The Good:
  • Great savings accounts. I like online banks because they usually offer great rates on savings accounts. As of this writing HSBC offered 3.0% APR on it’s savings account.
• The Bad
  • Offers an “assisted” system for trading stocks. Their first step was to fill out a contact form, for an advisor to contact me. I’m looking for something more hands on, so this wasn’t what I was looking for.

TradeKing focuses on trading and stocks only. This I like. Their site is easy to navigate and offers a nice FAQ and community sections. I’ve read lots good reviews about them. Also they have received numerous awards (for customer service, and their website among other things). If you’re ok with the slightly higher commission than zecco, tradeking is the place to be.

• The Good:
  • Offered “Live Chat”. I love this, and think it’s great when websites utilize it. Of course there wait times, and lag to deal with but the fact that they offer it, I think is wonderful.
  • Offers a nice “community” section of their website, where you can compare, talk with, and befriend other investors. Great idea.
  • Cheap trades at $4.95 per trade.
• The Bad:
  • Online bank transfers take 5 days to clear, that’s in addition to the 5 days taken to verify your account when you first sign up. So you’ll have to be patient when you first sign up, and when making transfers.

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Yesterday the feds cut rates for the second time this month down to 1%.  If you ask me – that is pretty, dang, scary, low.  And it’s scary to think that the Feds could actually lose their leverage, and influence of the key benchmark rate if they have to go all the way down to zero.  What would reaching zero mean?

After doing some research, I realized that there wouldn’t be some great catastrophe, or calamity if the feds did cut the rate to 0.  The interest rate has gone down to similar lows in the US before – although never reaching the zero level.  And, in fact the Swiss, in the 1970’s, had to incur an equivalent negative of the federal funds, imposing a tax on bank deposits, in effect creating a negative interest rate.

If the rate did decrease to such a level of zero, it would be bad in the sense that the feds would then lose that tool as a way of pushing the economy.  And I have a bad feeling that our government, and their ability effectively print money and add more liability to our skyrocketing national debt, would find other ways to stimulate our economy.

“If the federal funds rate were to reach zero, the Fed would not be out of tools for stimulating the economy. But it would have to resort to unconventional approaches that it has never used before.” Source NYT

Can you smell another government bail out? And another, and another…scary.

These are grave times for the US economy, and every time I read that the US continues to head towards a recession, I remember the words of Donald Trump on CNBC with Jim Cramer more than 9 months ago: “We’re in a Recession [right now] – at a minimum”.

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