Alternative Investments Are Not Just for the Wealthy

This page may include affiliate links. Please see the disclosure page for more information. We hear a lot these days about alternative investments. Wall Street firms regularly tout their expertise in these investments and try to convince us we need them in our portfolio. In the beginning, alternative investments were only available to what most would consider…

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Alternative Investments Are Not Just for the Wealthy was first posted on February 3, 2020 at 6:00 am.
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What Is an ETF?

Maybe you’ve recently spoken to a broker or financial adviser about investments, and they suggested exchange-traded funds (ETFs) as a way to diversify your portfolio and boost your earnings. But, you don’t know how they…

The post What Is an ETF? appeared first on Crediful.

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7 Best Short-Term Bonds Funds to Buy in 2020

For investors with short-term saving goals, short-term bonds can be appropriate investments for your money.

They are stable and they certainly provide a higher return than a money market fund.

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However, even with the best short term bond funds, there’s also a risk of losing a percent or two in principal value if interest rates rise.

There are many options available to you, but your best option is to invest in taxable short-term bond funds, U.S. Treasury short-term bond funds and federally tax-free bond funds.

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What are short-term bonds?

Short-term bonds, or any bonds for that matter, are debts instruments that companies and the government issue. They typically mature in 1 to 3 years.

When you buy a bond, you are essentially lending money to the issuing company or government agency.

They are obligated  to pay back the full purchase price at a particular time, which is called the “maturity date.” 

Short-term bonds are low risk investments and you can have access to your money fairly quickly.

As with all bond funds, one of the risk of short term bond funds is that when interest rates rise, the prices of the bonds in the fund decrease.

But short term bond funds have a reduced risk of default, because the bond funds are backed by the full faith and credit of the U.S. government.

Moreover, because the term is short, you will earn less money on it than on an immediate-term or long term bond fund.

Nonetheless, they are still competitive and produce higher returns than money market funds, Certificate of Deposits (CDs), and banks savings accounts. And short-term bonds are more stable in value than stocks.

At a minimum, don’t buy a short-term bond fund if you’re saving for retirement or if you want to hold your money longer.

If you’re looking to invest your money for the long term and are still looking for safety, consider investing in Vanguard index funds. 

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Short-term bonds: why do you need to invest in them?

You should invest in short-bonds if you intend to use the money in a few years or so. However, don’t push your emergency cash into bonds. That is what a bank savings account is for.

Also, you should not put too much of your long term investment money into bonds, either. If you have a long term goal for your money, it’s best to invest in mutual funds such as Vanguard mutual funds, real estate, or your own business.

Here are some situations where you should invest in short term bonds.

  • You want to stabilize your investment portfolio. If you have other aggressive investments, you may need to balance it out with short term bond funds. The reason is because short term bonds are safer comparing to stocks.
  • Buying a house.
  • Retirement. If you’re thinking of retiring in a few years, short-term bonds are appropriate.
  • Purchasing a car.
  • You’re a conservative investor. Not all investors can stomach the risk of losing all of their money due to the market volatility. So instead of investing in stocks, which falls on the riskier end of the securities spectrum, you should invest in short term bond funds.

Best short-term bond funds to consider:

Most people prefer to buy bonds through a broker such as Vanguard or Fidelity.

If you’re looking for the best short-term bond funds to buy now, consider these options:

  • Vanguard Short-Term Treasury Index Fund Admiral Shares (VSBSX)
  • Vanguard Limited-Term Tax Exempt Fund Investor Shares (VMLTX)
  • The Fidelity Short Term Bond Fund (FSHBX)
  • Vanguard Short-Term Tax-Exempt Fund Investor Share (VWSTX)
  • Vanguard Short-Term Investment Grade fund (VFSTX)
  • T. Rowe Price Short-Term Bond Fund (PRWBX)
  • Vanguard Short-Term Bond Index Fund (VBIRX)

Tax free short-term bonds

There are some short-term bond funds that are both state and federally tax free. But there are not too many out there.

However, the ones that are available are good investments. So, if you are in a low state bracket and in a high federal bracket, consider investing in these Vanguard bond funds.These are federally tax free bond funds:

Vanguard Limited-Term Tax Exempt Fund Investor Shares (VMLTX)

This Vanguard bond fund seeks to provide investors current income exempt from federal taxes. The fund invests in high-quality short-term municipal bonds.

This bond fund has a maturity of 2 years. So, if you are looking for a fund that provides modest income and is federal tax-exempt, the Vanguard Limited-Term Tax Exempt Fund is for you.

The fund has an expense ratio of 0.17% and a minimum investment of $3,000. This makes it one of the best short term bonds to buy.

Vanguard Short-Term Tax-Exempt Fund Investor Share (VWSTX)

Like the Vanguard Limited Short Term fund, this fund also provides investors with current income that is exempt from federal income taxes.

The majority of the fund invests in municipal bonds in the top three credit ratings categories. It also invests in medium grade quality bonds.

This fund too has an expense ratio of 0.17% and a minimum investment of $3,000, making it one of the best short term bond funds.

U.S Treasury Short-term Bond Funds: Vanguard Short-Term Treasury

If you’re interested in a bond fund that invests in U.S. Treasuries, then U.S.Treasury bond funds are a great choice for you. One of the best U.S.Treasury bond funds is the Vanguard Short-Term Treasury.

This bond fund seeks to track the performance of the Bloomberg Barclays US Treasury 1-3 Year Bond Index. The Vanguard Short-Term Treasury invests in fixed income securities with a maturity between 1 to 3 years.

This bond fund has an expense ratio of 0.07% and an initial minimum investment of $3,000. Currently, this short term bond fund has a 1-year yield of 4.51%, making it one of the best short term bond funds.

Of note, this fund is also available as an ETF, starting at the price of one share.

The Fidelity Short-Term Bond Fund (FSHBX)

The Fidelity Short Term Bond Fund is one of the best out there for those investors who want to preserve their capital. This fund was established in March of 1986 and seeks to provides investors with current income.

The fund managers invests in corporate bonds, U.S. Treasury bonds, and assets backed securities. Over the last 10 years, this bond fund has a yield of 1.98% and a 30-day yield of 1.98%. This Fidelity bond fund as an expense ratio of 0.45%. There is no minimum investment requirement.

Taxable short-term bond funds: Vanguard Short-Term Investment Grade fund (VFSTX)

If you are not in a high tax bracket, then you should consider investing in a taxable short term bond fund. One of the best out there is the Vanguard Short-Term Investment Grade fund.

This bond fund provides investors exposure to high and medium quality investment grade bonds, such as corporate bonds and US government bonds. This fund has an expense ratio of 0.20% and an initial minimum investment of $3,000, making it one of the best short term bond funds out there. 

T. Rowe Price Short-Term Bond Fund (PRWBX)

The T. Rowe Price Short-Term Bond Fund invests in diversified portfolio of short term investment-grade corporate, government, asset and mortgage-backed securities. This bond fund also invests in some bank mortgages and foreign securities. This fund produce a higher return than a money market fund, but less return than a long-term bond fund. The T. Rowe Price Short-Term Bond Fund has a minimum investment requirement of $2500, making it one the most favorite short term bond funds out there.

Vanguard Short-Term Bond Index Fund (VBIRX)

The Vanguard Short-Term bond is a good choice for the conservative investor. It offers a low cost, diversified exposure to U.S. investment-grade bonds. This has fund has a maturity date between 1 to 5 years. Moreover, the fund invests about 70% in US government bonds and 30% in corporate bonds. The bond fund as an expense ratio of 0.07% and a minimum investment requirement of $3,000.

How to Invest in Short-Term Bonds

If you’re considering in investing in these or any of Vanguard bond funds, you need to do your due diligence.

First, think about what you need the bond fund in the first place. Is it to diversify your investment portfolio?

Are you a conservative investor who need a minimize risk at all cost? Or, do you want to invest in a short term bond fund because you need the money to use in a few years for a vacation, buying a house, or planning for a wedding?

Once, you have come up with answers to this question, the next step is to do your research about the best bond fund available to you.

Use this list to start. If it’s not enough, do your own research.

Look into how much the initial minimum investment is to buy a bond fund. Most Vanguard short term bond funds require a $3,000 minimum deposit.

Some Fidelity bond funds, however, have a 0$ minimum deposit requirement.

Next compare expense rations, performance for different funds to see if they match your investment goals. But you have to remember that past performance is not an indication of future performance.

Your final step is to open an account to buy your bond funds. If you choose Vanguard, you can do so at their website.

How do you make money with short-term bonds?

You can make money with short-term bonds the same ways you make money with a mutual fund (i.e., dividends, capital gains, and appreciation). But most of your returns in a bond fund comes from dividends.

The bottom line

In brief, short-term bonds are great investment choices if you have short term saving goals. You may be interested in buying these bonds because you expect to tap into your investment within a few years or so. Or, you want a more conservative investment portfolio.

Short term bonds produce higher yields than money market funds.

The only problem is that the share prices can fluctuate. So, if you don’t mind market volatility, you may wish to consider short-term bonds.

Speak with the Right Financial Advisor

  • If you have questions beyond short-term bonds, you can talk to a financial advisor who can review your finances and help you reach your goals (whether it is making more money, paying off debt, investing, buying a house, planning for retirement, saving, etc).
  • Find one who meets your needs with SmartAsset’s free financial advisor matching service. You answer a few questions and they match you with up to three financial advisors in your area. So, if you want help developing a plan to reach your financial goals, get started now.
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The post 7 Best Short-Term Bonds Funds to Buy in 2020 appeared first on GrowthRapidly.

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Best Robinhood Alternatives: Apps To Use If You Quit Robinhood

If you’re looking for a replacement for the Robinhood trading app, here are some of the best Robinhood alternatives to consider.

The post Best Robinhood Alternatives: Apps To Use If You Quit Robinhood appeared first on Bible Money Matters and was written by Peter Anderson. Copyright © Bible Money Matters – please visit biblemoneymatters.com for more great content.

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How to Invest in REITs

Investing in real estate the old-fashioned way is hard. Not many investors have enough extra money for a down payment just laying around. And even if they did, tying all of that money in a single property might give them pause.

If you’re in this situation, the solution to your problem might just be a Real Estate Investment Trust, also called a “REIT”. A REIT operates like an index fund, but for actual real estate properties.  According to Nareit, approximately 145 million American households (44%) are invested in REITs.

It combines the best of both worlds: the potential for high gains in the real estate market, but at a level that anyone can afford. Keep reading to learn more about this real estate investment option.

How REITs Work

You can think of REITs as a type of index fund for real estate. REITs are funds that invest in real estate and allow people to buy shares. Just like with stock market funds, you’ll earn dividends, and you can buy or sell shares at any time for (hopefully) a profit.  

There are some special rules that apply to REITs compared with other types of funds, however. For example, a REIT must have at least 100 shareholders, be managed by a board of directors or trustees, invest at least 75% of the funds in real estate of some sort, and pay at least 90% of its income to shareholders as dividends. 

REITs are a hot commodity, too. To see why, it’s helpful to look at the fund FTSE Nareit All REITs, which is a fund-of-REITs that invests in all publicly-traded REITs in the U.S. stock markets. The yield dividend for this fund is 4.3%, as opposed to just 1.8% with the S&P 500. It also has a higher 20-year return of 9.5% vs. 6.3% for the S&P 500, too. 

However, the FTSE Nareit All REITs fund is down this year, by a lot: 17%, in fact. 

That brings up one of the major downsides of REITs: they’re highly volatile. Although they’re generally a good piece to add to your portfolio in small amounts, you won’t want to invest a lot of money in them, especially if you’re getting close to when you might need that money. 

Types of REITs

Currently, there are around 1,100 REITs in the U.S., with about 225 of them available on the publicly-traded markets. That’s a lot of REITs, and as you might expect, there are almost as many types of REITs available as there are ways to invest directly in real estate. 

Some of these categories overlap with each other. For example, an REIT that specializes in office buildings and a REIT that specializes in apartments both fall under the same umbrella: equity REITs. Let’s sort out some of these categories next. 

Equity REITs

Equity REITs are what most people think of when they think of REITs. These are funds that focus on purchasing income-producing properties like retail stores, house rentals, and more. In this way, they’re more akin to people who purchase buy-and-hold real estate, and bank on the value of the rental increasing and steady income from rent each month. 

Mortgage REITs

Some REITs focus on the actual lending of money — i.e., the mortgages themselves, rather than the properties they buy. Mortgage REITs might invest in mortgages directly, or focus on mortgage-backed securities (yes, the very same from the famed Great Recession). 

Hybrid REITs

Most REITs fall under the umbrella categories of either equity REITs or mortgage REITs. Hybrid REITs, however, invest both: buying actual properties, and funding the mortgages that other people use to buy other properties, too. 

Sector-Based REITs

Another way to parse out REITs is by certain industries. Each of these REITs also falls under the equity, mortgage, or hybrid umbrellas. For example, a residential REIT can specialize in buying homes and apartments, providing the mortgages for other people to buy them, or both. 

Here are some of the most common sector-based REITs:

  • Retail
  • Data centers
  • Office buildings
  • Healthcare buildings
  • Self-storage properties
  • Timberland (forest land for logging)
  • Residential (standalone homes, duplexes, apartment complexes, etc.)

The advantage of sector-based REITs is that if you’re savvy, you can key in on trends that affect certain parts of the real estate industry. You might have a hankering that there’s something big going on in the office building vs. residential market, for example, and that might affect your investment decisions.

Pros and Cons of REITs

There’s a reason REITs are considered separate investments from the usual breakdown of stocks vs. bonds. Here are some considerations, before you invest in a REIT.

REIT Pros REIT Cons
Highly liquidEasy to get startedPotential for high returnsEasy to diversify your portfolio High volatilityManagement feesDividends are taxed as ordinary income

REIT Pros

There’s a lot to like about REITs. Let’s look at each of these more closely.

Highly Liquid

If you buy a real estate property, you might find yourself in the unlucky position of not being able to sell it later. And even if it is a hot seller’s market, there’s a lot of time, hassle, and money you have to spend to turn that property into cash in your bank account. 

But with REITs, you can just click a few buttons to sell your shares and get done with it. No realtors, no title companies, fewer hassle. 

Easy to Get Started

REITs are infinitely more affordable than buying an entire property. A single share of VNQ (an ETF version of a REIT offered by Vanguard) is just $86 as of this writing, for example. 

On the other hand, if you were to buy real estate, you’d need a lot of cash up-front. If you bought a home in the Seattle marketplace with an average value of $784,000, for example, you’d need a down payment of $157,000 if you used a conventional mortgage with no PMI. 

Not exactly obtainable for the average investor. 

Potential for High Returns

REITs offer the potential for some pretty impressive returns. For example, VNQ has shown returns as high as 30% in some years. Imagine earning a 30% APY from your bank account — that’d be quite the cause for celebration.

Easy to Diversify Your Portfolio

Since REITs are so easy to handle, it’s also easy to add them into your portfolio mix and keep them at whatever percentage you want. You can even automate it entirely by buying REITs within a robo-advisor platform. 

For example, let’s say you want to keep real estate to just 5% of your portfolio. If we use the same example from Seattle above with an average home value of $784,000, you’d need at least $15.7 million more in your portfolio to keep it to that target 5% mark. 

Again, not quite so obtainable for the average bear. 

REIT Cons

So, why doesn’t everyone invest all in REITs, all the time? They do have some downsides.

High Volatility

It’s true that Vanguard’s VNQ REIT has offered returns as high as 30% in some years. But it’s also true that REITs can go down in value — and sometimes spectacularly so. During the 2008 real estate crash, for example, this same fund offered returns of negative 37%. That’s not exactly something you want to see if you’re right on the verge of retiring, for example. 

Management Fees

If you’re a DIY real estate investor, you can control a lot of the costs yourself. You can even get up in the middle of the night to fix a flooding toilet, if you don’t want to spring for property management services, after all. 

But if you invest in a REIT, there will be costs in the form of an expense ratio and possibly trading fees. These don’t have to be high (VNQ has an expense ratio of 0.12%), but they’re a cost you’ll have to pay if you’re not a DIY real estate investor. 

Dividends Are Taxed As Ordinary Income

Many types of investments pay out qualified dividends, which are taxed at a lower capital gains rate. But REIT dividends aren’t considered “qualified,” and so they’re generally taxed at your marginal tax rate as ordinary income (like from your job), and this can be a lot higher than the capital gains rate. 

Are REITs a Good Option for You?

REITs are just like any other investment type. They’re a tool, and whether they’re a good tool for you depends on your situation. 

If you’re looking for an easy and affordable way to invest in real estate without jumping in headfirst to the DIY real estate investing world, REITs can be a good option for you. They’re also a good choice if you’re just getting started and you don’t have millions (or even thousands) to invest in real estate just yet. 

But if you think you’d enjoy a more hands-on approach and you’re not afraid of devoting a lot of time and money (and headaches) to the cause, investing more directly in real estate might be in the cards for you. 

Remember, there’s no wrong answer here. Only what you (and/or your financial advisor) determines is best.

The post How to Invest in REITs appeared first on Good Financial Cents®.

Source: goodfinancialcents.com

Robinhood Alternatives

Robinhood pledges to make the stock market more accessible – but so does almost every investment platform today. Which ones do it most effectively?

The post Robinhood Alternatives appeared first on The Dough Roller.

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Benefits of Investing Through a Crypto Wallet

For the past few years, it has continued to become quite clear that there is a lot of value and potential for future gains for those that continue to invest in digital currencies. When you are looking to invest in digital currencies, there are plenty of important decisions that will need to be made along the way. This can include choosing which coin to invest, how much capital to invest, and what to invest through. For most people, investing and holding your crypto funds in a crypto wallet is a good option. There are a variety of benefits that come when you invest through one of these wallets.

For the past few years, it has continued to become quite clear that there is a lot of value and potential for future gains for those that continue to invest in digital currencies. 

Easy to get started

A key advantage of investing in Bitcoin and other digital currencies is that it is easy to get started. The application process to open up a wallet and account can take just a matter of minutes. Once the account is opened, you will be able to start purchasing these coins immediately after a deposit is made. This is very quick compared to investing in a stock or other investments through traditional brokerage accounts.

Variety of different coin options

A key advantage of using a well-established crypto wallet to invest and hold your digital currencies is that there are many coin options for you to choose from when you are picking an investment plan. While Bitcoin may be the best-known digital coin available today, it is far from the only one. Today, there are many coins that you can choose from, each of which has unique features that can help to provide a great service and offer promise for future price appreciation.

For those that are going to invest in digital currencies, having access to more coins is very important. Those that are able to invest into different coins will effectively be able to diversify their investment holdings in this industry, which can mitigate some risk and improve your overall return potential. Some other coins beyond Bitcoin to consider investing in include Ethereum, Ripple, Litecoin and others that provide value to you as an investor. No matter what type of coin you want to invest in, they can be easily purchased through a wallet. Many of these platforms use more traditional forms of payment including Apple Pay and credit cards to complete these transactions.

Today, there are many coins that you can choose from, each of which has unique features that can help to provide a great service and offer promise for future price appreciation.

Security for account and transactions

The overall security of a cryptocurrency wallet is something that all people need to take seriously. When you invest your money into a digital coin, you will want to know that it is protected and encrypted. Through a digital and crypto wallet, you will know that your data, information, and access to your investment are properly protected. There will be a very secure sign in process that will require you to provide a dedicated password and user ID that is encrypted. This can help to ensure that people are not able to access your account unless you want them to be able to do so. You are also able to complete a variety of transactions privately and securely without concern that other parties will be able to see your transaction and other data.

Dedicated support team

Putting your digital currencies into any form of digital wallet can seem stressful at first. However, your concerns will be put at ease when you quickly find out about the dedicated service that you can receive. A crypto wallet firm will have a dedicated team that works to ensure that you understand all of the features, are able to access your account at all times, and have any questions answered. Not only will there be plenty of FAQs that you can review when trying to better understand the wallet and product, but you can also send in any questions or reach out to a customer service team member to learn more.

Manage portfolio

As a cryptocurrency is a form of investment, you will also want to be able to manage it in the same way you would manage other assets that you own. With one of these wallets, you will receive an immediate real-time view of your investments and holdings. This will include having access to a variety of charts and other analytical tools that can be used to assess the performance of each one of your underlying coins. This could be the guidance you need to change your investment decisions going forward.

Complete transaction to buy or sell products

You should also consider using a crypto wallet because it can be used to complete transactions. While many consider Bitcoin and other digital currencies to be a form of investment, they are also a form of currency that can be used to purchase goods and services from people all over the world. When you have a wallet, you will be able to send money to anyone else in the world at any time of the day. This can be a great way to complete a purchase or it can be done to swap coins with other individuals.

Ultimately, investing in a cryptocurrency can be a great long-term investment. While there is bound to be a lot of price fluctuation as the years go by, many expect that the value of a coin will continue to increase and will be worth a lot more in the future. As you are looking for a place to invest and hold your digital coins, using a cryptocurrency wallet is a great option. There are many advantages and features that come with one of these wallets that can make it an ideal option for you.

Source: quickanddirtytips.com

The 6 Best Stock Trading Apps

Anyone can get started trading stocks with a smartphone and a couple of dollars. Explore these top picks for the best mobile investing apps.Anyone can get started trading stocks with a smartphone and a couple of dollars. Explore these top picks for the best mobile investing apps.

The post The 6 Best Stock Trading Apps appeared first on Money Under 30.

Source: moneyunder30.com

Best Futures Trading Platforms in 2021

A futures trader

A futures contract is one of the most complex and riskiest securities traded today. That’s because if you hold the wrong side of a futures contract, your losses aren’t capped by an up-front purchase price. Instead your gains or losses are determined after the contract closes. This can set you up for big gains and big losses. Trading futures well means that you need the right tools. Depending on your needs in the marketplace, one of the platforms reviewed below can help you make the most of this asset. A financial advisor can help you decide if futures trading fits with your investing strategy, timeline and risk profile.

A futures contract is a promise to buy or sell an asset on certain terms. You fix the price and date in advance. If prices soar, futures buyers makes money because they get to buy the asset for less than it’s worth. If prices fall, sellers make money by selling the asset for more than it’s worth. This structure means that the other side of the contract loses money. But unlike a stock or options contract, your potential losses can far exceed what you paid to invest.

Best Platform Overall: Interactive Brokers Pros

Interactive Brokers is all about data. When it comes to data, technical indicators and customization, this platform more than stands out. This is particularly valuable for futures trading, given the degree to which high-performing traders rely on technical data. The same is true when it comes to fundamental analysis, as Interactive Brokers provides outstanding sources for news and other real-world data.

When it comes to complexity, Interactive Brokers also brings one of the best sets of trading tools on the market. This platform offers more than 80 different tools for setting conditions, algorithmic and automatic triggers, building multi-step orders and other forms of complex trading.

If you’re looking for a comprehensive, customizable platform, Interactive Brokers is probably the tool for you.

Cons

Interactive Brokers is, in a word, overwhelming.

While experienced investors will find much to love about Interactive Brokers, this is a very complex platform. Inexperienced investors will find the program difficult to use. More importantly, they will find this program very difficult to learn.

If you’re learning how to invest, Interactive Brokers is more likely to get in the way than help you grow. However, a high-performing investor will really like this platform.

Best Platform For Dedicated Futures Traders: NinjaTrader Pros

Here is what we wrote in our review of NinjaTrader: “NinjaTrader may be one of the most customizable trading platforms on the market. It is a terrific fit for specialty traders, since it’s about the closest you’ll ever get to building your very own trading platform.”

This flexibility makes NinjaTrader one of the best platforms on the market for serious futures traders.

One of the most distinctive things about futures, and the related options market, is its breadth. You can trade in assets ranging from precious metals and agricultural products to stocks and cryptocurrency. This makes every dedicated trader’s needs different, and NinjaTrader the best platform to meet their needs.

You can build NinjaTrader around the data sets, presentation and trading tools that meet your personal needs. Whether you’re trading gold, real estate or oil futures, NinjaTrader is the right platform for you.

Cons

No matter who you are, NinjaTrader has the tools that you need and the flexibility to build your platform around it. But at the same time, no matter who you are, NinjaTrader almost certainly has more tools than you need. This platform comes with an enormous range of tools, and sifting through them can be a chore as much as a value.

This is also not a cheap platform. NinjaTrader’s exact costs depend on your contract, but the brokerage requires a $400 minimum account to trade futures and options contracts can often cost between $1.29 and $2.58 to trade. These price go down if you purchase the NinjaTrader platform for $1,099.

Best Platform For Ease of Use: TD Ameritrade thinkorswim Pros

Man jumping from one cliff edge to anotherCalling thinkorswim easy to use is a misnomer. This is by absolutely no means an intuitive platform. In fact it is one of the more complex platforms on the market today, with a wealth of data and tools that can meet the needs of just about any trader. However, in the context of futures trading, this platform is one of the best choices available for investors who want a streamlined trading experience. In addition, thinkorswim is designed with the user clearly in mind to a degree that many high-performance platforms neglect. There is a very real degree of tension when it comes to making a platform like this clean and accessible. Balancing that against the sheer number of tools that a sophisticated trader needs means that the user experience will often lose.

This is why thinkorswim stands out. Investors who trade futures need sophisticated products. You can’t operate in this market with a budget platform, and often that can mean spending as much time struggling with your trading tools as using them. thinkorswim makes that experience much easier while retaining all the complexity.

Cons

This is not a dedicated product. Don’t get us wrong, thinkorswim is an outstanding investment platform.

However, it is an outstanding platform for sophisticated investors across the board. This tool has not been built with Dow futures trading (or any kind of futures trading) in mind, and as a result it fails to provide many of the benefits that more specialized tools can offer. It does not have the same degree of data and customization that you will find in some of the other products on this list.

If you’re looking to add futures as an element of your portfolio, that shouldn’t be a problem. But dedicated traders will likely notice the difference.

Best Platform For Price: TradeStation Pros

For a sophisticated futures platform TradeStation offers some of the best prices around.

Understanding the pricing scheme of TradeStation can take some doing. This product sets its prices based around its many different products and account types, meaning that what you pay can be highly individual. For futures traders, contracts can be priced as low as $0.50 – $0.85 per contract. While its desktop product, TradeStation Select, requires a $2,000 minimum balance, the web-based TradeStation Go has none.

These are some of the best prices on the market for futures traders, and they are packaged with a smart trading platform.

Cons

TradeStation is best for highly active investors, which often may cut against a futures trader’s business model. If you are someone who executes frequent trades then you might find a lot to love in this product. Its prices are built into a highly responsive platform that helps volume traders work well.

However, if you are someone who trades weekly or monthly (as many futures traders do), then this may not be the right platform for you. The prices offered by TradeStation will matter less to someone who trades slowly and infrequently.

Best Platform For High Speed Traders: Lightspeed Pros

This is one of the fastest trading platforms on the market. In addition to a wide, if standard, range of technical indicators and data sets, Lightspeed Trading also offers tools to help you build your trades around speed. Investors can select their own trading venues and markets as they build each transaction, all with the purpose of maximizing speed and profits.

At the same time this service offers terrific volume-based pricing. While Lightspeed’s standard prices are middle to high at $1.29 per side for futures contracts, highly active traders can expect to pay as little as $0.30 – $0.65 per contract. This makes it a fantastic deal for traders who can keep up enough volume.

Cons

Lightspeed requires a high minimum balance of $10,000 for its web client and $25,000 for its desktop software. This is orders of magnitude more than most comparable platforms.

At the same time, Lightspeed’s tools are highly specialized. This is not a platform for fundamental analysis or long term thinking. Lightspeed has built its trading environment for data-driven, high-volume technical analysts. Anyone who would like to move more slowly, trade fewer assets or make decisions based on anything other than market data should look elsewhere.

The Bottom Line

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We have not included a “Best Platform for Beginner Futures Traders” section. That’s because futures carry an outsize risk of loss disproportionate to many other assets. In other words, this is not a good asset for beginners. Experienced investors, meanwhile, have several good choices: For a great overall experience, consider Interactive Brokers; for a dedicated futures trading experience consider NinjaTrader; for ease of use and accessibility consider thinkorswim; for a price-conscious experience, consider TradeStation; and if you manage futures like a day trader, check out Lightspeed. It’s probably got just the tools for you.

Tips for Investing

  • Most retail investors don’t trade in futures contracts for good reason. These are risky products with a very real potential for catastrophic losses. But that doesn’t mean you should automatically write them off. A financial advisor can give you excellent guidance on whether futures make sense for you. Finding a financial advisor doesn’t have to be hard. Instead, SmartAsset’s matching tool can help you find one in your area, in minutes, who can help you decide whether futures can diversify your portfolio or weigh it down. If you’re ready, get started now.
  • One way you can get a quick and relatively accurate overview of your investing is by taking advantage of a free, easy-to-use investment calculator.

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