Ally Invest Brokerage Review
Ally Invest is a leader in retail brokerages for Americans and international traders, as it offers a wide range of both self-directed and managed investment products with some extraordinarily low commissions for traders and long-term investors.
A considerable amount of products and services make Ally Invest one of the most popular brokerages in the United States, as it has a significant online banking presence and auto loan division backing it financially. The wealth management and brokerage platform offer plenty of self-directed and managed investment products for any level of investor, with varying degrees of professional help available.
Is Ally Invest the best stock broker for beginners? Ally Invest has been around for several years now and has simply been an extension of a large bank that has had an online presence for even longer. Simplicity and straightforward investing are what you can expect here.
Platforms and Tools
The Ally Invest trading platform provides charting capabilities and a quick glance at your trading positions. The platform is more suitable for investors instead of active traders. As we will see later in this article, commissions are relatively cheap for an investor, but short-term traders have better alternative brokerages like Interactive Brokers.
The platform is web-based and allows you to look at your investments with any web browser that has access to online communications. It also allows you to look at a profit/loss graph, watch lists, research, option chains, and mediocre minor features. The platform has won several awards from Barron’s, stockbrokers.com, and Nerd Wallet. There is also a mobile version that is stripped down with basic functionality to monitor positions or perhaps trade longer-term types of trades.
Ally Invest allows the trading of stocks and ETF markets, commission-free ETFs, options, bonds, mutual funds, and even offers Forex and futures trading if you choose to get involved with that, although that is through Ally Invest Forex which would be a separate account. The ETF and stock markets revolve around US markets only, as it is a US broker.
If you are looking for global markets, Ally Invest is probably not going to be for you as it focuses on the average investor and offers a lot of insight for those who aren’t necessarily financially savvy when it comes to stock markets around the world. There are foreign companies available through, but those are only the ones that offer ADRs, or American Depository Receipts, which are merely stocks that trade in the United States but represent a specified number of shares in a foreign corporation such as Alibaba from China.
One of the great things about Ally Invest is that they will automatically make an investment a DRIP, which stands for Dividend Reinvestment Plan. As long as the security is priced at four dollars or more, and trade on a major exchange they can be automatically reinvested every time you get a dividend. This is a great way to build up a larger portfolio without putting a lot of thought into it. Think about your great uncle who bought Coca-Cola shares in the 50s and build up that massive portfolio over the decades.
Commissions and Fees
While Ally Invest offers excellent commissions and fees for an investor, it’s not for the day trader. For example, the standard pricing is $0.00 per stock or ETF trade.
Options markets are covered as well, with the standard pricing charging $0.00 per turn, plus $0.50 per contract. If you were to buy 10 contracts in the options market, you would be looking at $5.0 per side.
Education and Research
Ally Invest offers significant research, for all traders, including some of the most followed analyst on Wall Street. There is an Education Center, which gives traders a bit of help when it comes to not only trading but the overall attitude of traders in general. There’s a blog, articles on trading, stocks, bonds, options, mutual funds, and how to go about saving for retirement.
The blog reads like a magazine, which helps people ask a lot of the right questions such as “Are options right for me?” There are also tools such as a CD Letter Tool, Wallet Wise – a proprietary system that they offer when it comes to banking and investing, budgeting, credit, and other areas of finance. That being said, as far as technical tools are concerned, the educational section is rudimentary at best. This is not a place where you are going to learn how to become a top-notch technical trader based upon charts, but there are plenty of free courses available online to cut your chops that.
Customer service at Ally Invest offers phone support, with 24/7 availability. Because of this, you should never have trouble reaching the broker, and if you choose not to make a phone call, you can email Ally Invest, as well as online chat. On the whole, Ally is easy to reach and very accessible for any questions you may have.
Ultimately, the Ally Invest brokerage is an excellent place to do just that: invest. This is not a place where traders are going to come to day trade the markets because the fees would eat you alive. That’s not a knock against the broker. It’s just that it serves an entirely different function. It’s about customer service and ease of use more than anything else. The average day trader won’t need a lot of the handholding that a place like Ally Invest will offer. So, therefore, they can get better fees as the overhead for a bare-bones brokerage firm that focuses on speed over research will be able to offer.
If you are looking to invest for the long-term, Ally Invest has plenty of tools for you to calculate what you need, as well as where you may wish to be. The ability to automatically reinvest in a stock with your dividends, regardless of the stock as long as it’s more than four dollars per share is a huge bonus as well. This is one of those brokerage firms that is going to be excellent for an IRA or another type of buy-and-hold type of scenario. However, it also gives you the functionality to do something like selling a covered call, allowing you to pick up some premium in the options market for an underlying security that you own.
If you find that currencies or futures markets may be a possibility for your trading strategies as well, you can open up another account through Ally Invest Forex to take advantage of those markets as well. Ally Invest is a member of the SIPC, which is the Securities Investor Protection Corporation, covering customer claims up to $500,000, including a maximum of $250,000 for cash claims.
Ally Invest also has an additional coverage of up to $37.5 million including up to $900,000 in cash with an aggregate cap of $150 million. In other words, you are well protected, but it should be kept in mind that this protection does not extend to the futures/Forex account. Beyond that, it’s an American brokerage, so obviously it is under the auspices of all of the protections and regulations that investors in the United States deal with.
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