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Discount Brokerage Weekly Roundup – January 31st, 2014

Orange is the new BeebsAs January comes to an end, looking back on all of the deals and announcements from discount brokerages, it seems like that there was way more drama amongst the brokerages than even Justin Bieber could muster up.  And if this past week is any indication of what’s ahead, February will see discount brokerages pushing to make headlines of their own.

Even though January was coming to an end, the Chinese New Year was just beginning and with it came deal announcements from two bank-owned brokerages as well as a dysfunctional relationship themed commercial just in time for Valentine’s Day.   Online brokerages were also in the spotlight for other reasons too as a pair of articles on trading traps and practice accounts came across our radar.  Finally, with all the deals now flying around a great forum post gives some perspective on how many free trades are enough.

Giddy Up

BMO InvestorLine kicked off the year of the horse with the launch of the traditional Chinese version of its website as well as with a cash-back promotion for $88.   Interestingly, BMO is also offering a deal with a slightly better payout of $100 alongside this promotion which makes it a bit of a tough call for investors who have to decide between being richer or potentially being lucky.  For full deals info, check out the discount brokerage promotions section here.

Caught in a Bad Romance

Also, with Valentine’s Day around the corner, it looks like BMO InvestorLine is pulling out all the stops with a relationship-themed video about choosing an online broker.  We spotted this video (see below) posted on Vimeo by what looks to be the agency associated with the commercial.  While having more than one brokerage is common for many investors, it’s an interesting to see the already intense marketing battle for brokerage clients heat up and move to video.

BMO InvestorLine – “A BMO InvestorLine Love Story”

Love for a Limited Time

Earlier this week, CIBC Investor’s Edge also ran a promotion alongside their Client Appreciation Day (Jan. 30th) in which they offered a very limited time offer of $400 for $50,000 deposits or $200 for $25,000 deposits.   Those wanting to access the deal for the online brokerage had to go into a CIBC branch to sign up.

Some Strings Attached

A pair of interesting articles for DIY investors crossed our radar this past week.  The first one from Yahoo Finance was about the traps that investors can get lured into by ‘low fee’ brokerages, especially in the context of TFSA accounts.   While there were some important points about avoiding over trading, another key point highlighted that DIY investors should decide what features or services are most important to their needs before deciding on commission price alone.

Another article from the Financial Post also geared towards self-directed investors had to do with practice trading accounts.  One of the central messages of the article is that practice accounts are better equipped to train investors on order entry rather than becoming savvy investors.  While somewhat true, there is definite value in being able to test and develop one’s discipline levels in a simulated environment rather than with actual cash.  As the famous investment saying goes, “if you don’t know what kind of investor you are, the stock market is an expensive place to find out.”

From the Forums

 Champagne Problems

Whether or not free trades are an incentive for those opening an online brokerage account depends on what kind of investor you’re talking about.  In this forum post from Canadian Money Forum, it is interesting to see that in spite of having 60 commission-free trades, one investor couldn’t really come up with trade ideas to use them on before the trade offer expired.  This highlights that sometimes how long a ‘free trade’ is available for might be more valuable than how many are offered.

That does it for this week’s roundup.  It will certainly be an exciting weekend for those keen on catching the Super Bowl.  For a fun read on picking Super Bowl champs using investing strategies, check out this link.  Let’s see if the Seahawks can buck this trend.  Have a great weekend!

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