Whenever you request guidance on how to invest to reach FIRE, you will often receive the comment you should invest in Emerging Markets e.g. through IWDA + EMIM. But should you?
Last Updated on November 16, 2020 by Mr. FightToFIRE
When trying to reach FIRE you can’t get around brokers. I’m no different. I have two brokers I use for various reasons and means. In short, I will cover why I chose which one, and for what reason. I will also keep this post up to date if I have new experiences to share.
Note: I will not cover all the possible brokers since I don’t have experience with them. I only want to give you my experience with those that I have worked with so far. This is also independent of my performance. In case I talk about bad customer experience with a certain broker, I will support using third party articles.
My preferred online brokers for stocks
DeGiro is a real price maverick [NL] in Europe. Traders also might know them for their free ETF selection. Important to note with this “free” selection is that you have to make sure you choose the exact security. “Exact” means: ISIN, name, currency, and exchange have to match. This really summarizes why I’m considering moving my personal portfolio from Lynx to DeGiro.
At the time of writing, they are active in 18 countries such as, but not limited to:
- The Netherlands
- Czech Republic
While they are well known throughout Europe for their low rates, they also receive (some) critique (at least up until a year or two-three ago) for:
- lackluster customer support .
- by default opting in clients for letting them lend out their securities.
DeGiro has been working on mitigating the first point and you can prevent the second point by opting for a custodian account. Although by doing this, you agree to marginal higher fees in certain cases (please check their site for your country’s fees and charges).
A word of caution about these additional fees. While they seem low at first, once you reach a certain level of equity it pays to look for an alternative broker if you do not want your shares to be lent out (and even if you don’t mind it!).
The Poor Swiss made an excellent comparison between a basic, custody and IB(/Lynx) account. While the comparison is done for CHF, EUR accounts won’t differ too much and might actually be more interesting due to the EURCHF exchange rate.
In conclusion, given their low costs (again, please check the site for your country for the exact details), as well as friendly UI, they are the preferred platform for many.
This holds especially true if you trade little (about once per month as part of your periodic deposit) and don’t hold a large portfolio.
At the moment, I use the Belgian broker named Lynx for my personal stocks portfolio. This might change in the future, depending on how the fees and commissions evolve. I also don’t trade as diversified as I anticipated, so the extensive platform at my disposal remains untouched.
For a lot of my European readers they are, as of November 2018, active in 9 countries:
- The Netherlands
- Czech Republic
They have a partnership with Interactive Brokers and thus use the same platform but with their own requirements as well as brokerage fees and costs.
The biggest downside in my experience is the archaic offline trading tool. It’s too cluttered for most people and has a rather steep learning curve depending on what you plan to trade.
To counter this, Lynx is constantly developing their online trading platform.
It might not be as extensive as DeGiro or even banks, but they are getting there and for most people, that should really only get a handful of ETFs, it’ll suffice. Then again, DeGiro might be a better solution for them as they are cheaper.
My main reason for choosing Lynx over Degiro is for their advanced trading options (which I don’t use as much as I thought I would) and the help they offer manage it through their excellent customer support. This support also helps me with anything else: managing the technicalities of my account, helping with local tax questions, etc.
Besides that, depending on how much I trade with them, it’s possible to get cheaper rates (though this might depend on the local branch as it’s not official 😉 ).
In conclusion, I’d recommend Lynx if you trade a lot each month and especially in different securities at the same time.
They also become an interesting option once your equity gets into the 6 figures, i.e., above 100,000 EUR.