One of the great parts about investing is that you don’t have to do it all on your own
In fact, a variety of trustworthy investing companies can handle the heavy lifting for you, helping you grow your income and build a sound financial future.
I’ve compiled a list of the 10 best investment companies and what makes each of them unique.
11 Best Investment Companies
You’ve decided you’re ready to start investing but aren’t sure where to start yet. After a careful analysis of all the investment companies out there, here are the top options to consider.
- J.P. Morgan
- Charles Schwab
- Merrill Lynch
- TD Ameritrade
- Edward Jones
1. J.P. Morgan
J.P. Morgan offers commission-free trading over a robust platform with advanced insights and a variety of tools to help make the right decisions.
The company offers access to stocks, ETFs, and mutual funds to help create a diversified portfolio, along with retirement plans like traditional IRAs and Roth IRAs.
J.P. Morgan’s Most Popular Investment Services:
- Self-Directed Investing: With the self-directed account, active investors get unlimited commission-free trades on thousands of securities, with a wealth of research and investment tools. You could also get up to a $700 bonus when you fund your general investment account or IRA with a qualifying deposit.
- Personal Advisors Service: This service pairs you with a team of fiduciary advisors who build a custom financial plan, match you with expertly-crafted portfolios to meet your investing goals, and offer ongoing advice and support.
- J.P. Morgan Self-Directed Investing
- J.P. Morgan Personal Advisors Review
Vanguard is one of the world’s largest investment companies, offering roughly 425 low-cost traditional funds and ETFs.
The company is known for offering funds that offer competitive long-term growth, along with low costs. Vanguard clients pay $0 commission when trading ETFs and stocks online.
- Vanguard Review
Fidelity is a large financial services company offering mutual funds, ETFs, managed accounts, and retirement plan management. The company is also known for offering affordable rates, making them a great service for investors who are looking to minimize costs.
- Fidelity Review
4. Charles Schwab
Schwab is considered to be one of the most robust financial providers for investors of all types — from beginners to experienced investors. The company offers a powerful trading platform, a wealth of investor information, brokerage services, retirement plans like IRAs and Roth IRAs, and commission-free trading.
- Charles Schwab Review
5. Merrill Lynch
Merrill Lynch is a leading financial services provider offering reasonably priced tradable securities, like stocks, bonds, mutual funds, ETFs, and options.
Founded in 1914, Merrill Lynch was acquired by Bank of America in 2009. This service is commonly used by beginner investors who leverage the Merrill Edge electronic trading platform.
- Merrill Edge Review
Wealthfront is a leading robo-advisor and investment service. By using Wealthfront, you can build affordable and diversified investment portfolios while accessing algorithms and other tools to help make better decisions. It’s a great service for beginner investors who are looking for guidance without human intervention.
- Wealthfront Review
7. TD Ameritrade
Another top brokerage for investors is TD Ameritrade, which offers a full range of investing services with low fees and a wealth of investor resources. Whether you’re looking to trade stocks, bonds, or funds, you can’t go wrong with TD Ameritrade. The company also charges reasonable account fees and other rates and has a robust mobile app.
- TD Ameritrade Review
BlackRock is an American investment company based out of New York City, and one of the top investment firms in the world. The company offers a range of managed funds and ETFs for investors and is known for helping investors plan for retirement and college savings.
If you’re working in medicine, education, culture, or research you should look into the Teachers, Insurance and Annuity Association (TIAA). This organization provides retirement investment and insurance services for people in those industries, along with special advisory services.
10. Edward Jones
Edward Jones offers a variety of financial services, including wealth management, retirement and college savings, stocks, bonds, and mutual funds, though fees are often higher than other investment companies.
However, the company is known for providing expert investment advice. Investors can receive a trusted investment advisor who gets to know you and understands your unique financial goals.
- Edward Jones Review
Prudential is a Fortune 500 company that provides insurance, retirement, and investment services. Prudential’s Personal Advisory Group offers a 30-minute complimentary call with prospective clients.
From there, our financial advisors can help with a customized financial strategy based on your goals and preferences. It’s a solid choice if you’re looking for tailored financial advice.*
What is an Investment Company?
An investment company is a financial firm that facilitates trades for customers.
This type of organization is fundamentally different from a traditional bank that offers savings programs. Investment companies act as wealth management providers, serving to help customers invest and increase their wealth in the stock market.
Keep reading to learn how a brokerage firm can help you execute your investment strategies and achieve your financial planning goals.
Three Types of Investment Companies
Generally speaking, there are three types of investment companies to explore.
1. Open-End Companies
An open-ended management company manages open-ended investment funds. For example, you can use an open-ended management investment company to directly purchase mutual funds and exchange-traded funds (ETFs).
2. Unit Investment Trusts (UITs)
A UIT pulls money from investors in a one-time public offering and invests it in a portfolio made of securities like bonds and stocks. This type of fund issues redeemable units, meaning they buy back units from investors at their net asset value (NAV).
3. Closed-End Funds
In a closed-end fund, money is raised through initial public offerings in bonds, stocks, money market instruments, and other types of securities.
Closed-end funds do not offer shares for sale. Rather, they sell a fixed number of shares at once. Funds are traded on a market like the NASDAQ or the New York Stock Exchange (NYSE), and prices are determined by the market.
This type of fund is not redeemable, meaning the fund is not required to buy shares back from investors.
Benefits of Working with Investment Companies
Leverage Competitive Rates
One of the nice parts about working with investment companies is that many organizations offer low competitive rates and management fees, giving you the opportunity to access managed funds while making your money work harder for you.
Look for investments that come with low expense ratios, where the majority of the money goes toward growing the fund — and not to marketing or management expenses.
The expense ratio is one of the most important things you can look for when considering an investment opportunity.
Diversify Your Holdings
One of the hardest things about the stock market is its natural volatility. In other words, companies and markets can fluctuate significantly on a daily basis. It’s not a secure method of investing that guarantees a return.
By purchasing a fund from an online broker, you spread your risk around over a broad range of investments. Purchasing shares in several different funds is a great way to diversify your portfolio and reduce overall risk.
Pool Your Money with Investors
Another great part about working with investment companies is they allow you to pool your money with other investors. This can help you access premium investments at lower overall costs.
By pooling money from a large number of investors, you can access a variety of funds that would otherwise be too costly to purchase outright. It can be a remarkably cost-effective way to increase wealth as long as you don’t pay too much in administrative, transaction, and other annual fees.
Tips for Working with Investment Companies
Know Who You Are Doing Business With
In some cases, an organization may appear to look like an investment company but can be excluded under federal securities laws.
According to the SEC, private investment funds with no more than 100 investors and private funds whose investors have a substantial amount of investment assets are not considered investment companies, even though they issue securities and engage in investing in securities. This may be due to their private nature, or the type of investors they are working with.
Read All Available Information Before Purchasing Shares
Make sure to read as much as you can about an investment company before you purchase any shares from them. That way, you have a clear understanding of the organization, the fund’s history, and any potential fees or other disclaimers that you face.
Oftentimes, investors purchase funds with low expenses only to find that they have to pay a portion back when they decide to liquidate the fund. This can eat into your bottom line, and in some cases, it can negate the value of purchasing a low-cost fund. As such, it pays to read as much as you can from a variety of sources before purchasing a fund.
Remember: The last thing you want to do is start making investments on a whim. Take responsibility for your investments, and know what you are purchasing ahead of time or you could get swindled into purchasing a stock that isn’t as great as it appears.
What’s more, as a best practice, you should avoid taking financial advice from people who have a vested interest in the fund or firm you are considering.
Types of Investments through Investment Companies
Investment companies tend to vary in the funds that they offer. Here is a breakdown of some of the types of investments you can find through investment companies.
A stock fund or equity fund is a type of fund that invests primarily in stocks or publicly traded shares of companies. The more of a company’s stock you have in your brokerage account, the more ownership you have.
However, stocks can be very expensive. By leveraging a stock fund, you can access a variety of stocks — instead of having to buy them all on their own. This type of investment is beneficial when the stock market is doing well.
As the name suggests, bond funds deal primarily in bonds, which are debt securities. There are many types of bonds, including government, corporate, floating-rate, fixed-rate, perpetual, and war bonds.
When you buy a bond, you essentially give that organization a loan with a promise to be paid back with interest by a certain date, which is called the maturity date. Bonds can be as short as a month or as long as 30 years. They’re a good asset to consider for your retirement accounts.
An index fund is a type of investment that tracks a particular market segment. For example, you may choose to purchase a fund that tracks the exchange.
Index funds are generally passively managed, meaning they are not manipulated by fund managers. As such, index funds are generally lower risk and have lower fees than other types of actively managed investments, like mutual funds.
Index funds offer a lot of great benefits. But one downside is they tend to have higher minimum investments.
A mutual fund is a type of investment that’s made of money taken from many different investors and used to purchase various securities. Mutual funds are actively managed and, as such, generally have higher fees. The goal of a mutual fund is to beat the market.
Exchange-Traded Funds (ETFs)
ETFs are like index funds in that they are based on a collection of securities. However, they differ in the way they are bought and sold. ETFs are bought and sold throughout the day, while index funds are traded based on the market price at the end of the trading day. ETFs offer greater liquidity and they are usually more affordable than index funds.
Frequently Asked Questions
What is a diversified portfolio?
A portfolio is considered to be diverse if it has a balance of mutual funds, index funds, individual stocks, and ETFs. By creating a diversified portfolio, it’s easier to manage risk and protect yourself from market volatility. Portfolio diversity is generally recommended for secure long-term investing.
What is a fiduciary?
A fiduciary is a person that acts on their client’s behalf instead of in their own interest. A fiduciary is bound to act in good faith, even if it means taking a loss on investment to protect the customer’s interest. In short, it’s a trusted source for investing.
Do investment companies offer credit cards?
Large investment firms sometimes offer reserve credit cards to customers. For example, Chase offers the Chase Sapphire Reserve card. Fidelity, Schwab, and TD Ameritrade also offer investment rewards cards for people who want to leverage credit card spending for long-term savings.
Can I purchase cryptocurrencies through an investment company?
Some investment companies are now offering access to cryptocurrencies. For example, Schwab, Fidelity, E*TRADE, and TD Ameritrade all make it possible to spend and manage currencies like Bitcoin.
This doesn’t remove any of the risks from buying cryptocurrency, and it’s important to remember that crypto is still highly volatile. However, it is easier to manage cryptocurrency when you can access it over the same platform as your other investments.
Should I use Google for financial advice?
Google is used for everything today, from buying groceries to figuring out what to watch on Netflix. So, why not use it for financial advice? Googling is a great way to find financial data to aid in your financial decision-making.
Gather as much insight as you can before pulling the trigger on investment to avoid making a poor decision and losing money.
What are robo-advisors?
Robo-advisors are automated financial services that provide account management and recommendations for investors. For example, you can use a robo-advisor to determine which stocks or mutual funds you should invest in based on your needs.
Robo-advisors are generally for beginner investors. But anyone can use them to improve or enhance their portfolio. Just watch out for high fees when using robo-advisors.
What is an expense ratio?
An expense ratio refers to how a fund is allocated in terms of what goes toward investing and what is used to pay for management and marketing services. Expense ratios are important when looking at index and mutual funds. The lower the expense ratio, the more affordable the fund is.
The Bottom Line
Opening an investment account has never been easier with the abundance of full-service investing services that are now available. Financial customers can receive professional investment advice and investment management services to help build strong and diversified portfolios for short-term and long-term growth.
Just remember to find an investment company that offers reasonable rates so that the majority of your funds go toward growing your investment and not paying for the account.
In addition, you should spend some time in advance considering what type of financial guidance you need to make good decisions. If you want to invest on your own, make sure the platform offers a variety of data and investment options. Or look for a platform with a robust robo-advisor or customer service team.
Take your time, research your options, and you’ll make the right decision. Here’s to picking the best investment company as you begin securing your financial future.
J.P. Morgan Wealth Management is a business of JPMorgan Chase & Co., which offers investment products and services through J.P. Morgan Securities LLC (“J.P. Morgan”), a registered broker dealer and investment adviser, member FINRA and SIPC. Millennial Money is a publisher of J.P. Morgan, (“Publisher”). The Publisher will receive compensation from J.P. Morgan if you provide contact details to speak with a J.P. Morgan representative. Compensation paid to the Publisher will be up to $500 per completed contact form. Compensation provides an incentive for the Publisher to endorse J.P. Morgan and therefore information, opinions, or referrals are subject to bias. J.P. Morgan and the Publisher are not under common ownership or otherwise related entities, and each are responsible for their own obligations. Investing involves market risk, including possible loss of principal, and there is no guarantee that investment objectives will be achieved.
*MMG Media Group, through its sites Millennial Money and Money Crashers is not a client of Pruco Securities LLC and compensation was given for this endorsement, which results in a conflict of interest. For more information, click here.
As an investment expert with in-depth knowledge of the financial industry, I can provide valuable insights into the concepts mentioned in the article about the "11 Best Investment Companies." My expertise extends to various investment options, strategies, and the overall landscape of financial services. Here's a breakdown of the key concepts discussed in the article:
- Offers commission-free trading with advanced insights and tools.
- Provides access to stocks, ETFs, mutual funds, and retirement plans.
- Services include self-directed investing and personal advisor services.
- One of the world's largest investment companies.
- Offers low-cost traditional funds and ETFs.
- Clients pay $0 commission for trading ETFs and stocks online.
- Large financial services company.
- Offers mutual funds, ETFs, managed accounts, and retirement plan management.
- Known for affordable rates.
- Considered a robust financial provider for all types of investors.
- Offers a powerful trading platform, investor information, and retirement plans.
- Provides commission-free trading.
- Offers reasonably priced tradable securities.
- Acquired by Bank of America in 2009.
- Commonly used by beginner investors leveraging the Merrill Edge platform.
- Leading robo-advisor and investment service.
- Allows building affordable and diversified portfolios using algorithms.
- Suitable for beginner investors seeking guidance without human intervention.
- Top brokerage offering a full range of investing services.
- Low fees, robust mobile app, and a wealth of investor resources.
- American investment company based in NYC.
- Offers managed funds and ETFs, known for retirement and college savings planning.
- Provides retirement investment and insurance services.
- Focus on professionals in medicine, education, culture, or research.
- Offers various financial services, including wealth management and retirement savings.
- Known for expert investment advice.
- Fortune 500 company providing insurance, retirement, and investment services.
- Personal Advisory Group offers customized financial strategies.
What is an Investment Company?
- An organization facilitating trades for customers, different from traditional banks.
- Acts as a wealth management provider, helping customers invest and increase wealth.
Three Types of Investment Companies:
- Open-End Companies: Manages open-ended investment funds.
- Unit Investment Trusts (UITs): Pulls money from investors in a one-time public offering.
- Closed-End Funds: Raises money through initial public offerings in various securities.
Benefits of Working with Investment Companies:
- Leverage competitive rates.
- Diversify holdings to manage risk.
- Pool money with other investors for cost-effective premium investments.
Tips for Working with Investment Companies:
- Know the organization you're dealing with.
- Read all available information before purchasing shares.
- Avoid taking financial advice from biased sources.
Types of Investments through Investment Companies:
- Stock Funds, Bond Funds, Index Funds, Mutual Funds, ETFs.
Frequently Asked Questions:
- Diversified portfolio, fiduciary, credit cards, cryptocurrencies, Google for financial advice, robo-advisors, expense ratio.
In conclusion, the article provides a comprehensive guide to investment companies, highlighting key players and considerations for individuals looking to secure their financial future.