SogoInvest. The Lowest Commission Out There.
Futurist David Houle (EvolutionShift.com) has revealed a new player that has entered the lineup in the discount brokerage game. SogoInvest is making their public debut today offering up one of the most attractive brokerage packages out there for the individual investor.
What makes SogoInvest so competitive? For one, their dirt cheap commissions starting at $3 per trade for investors with a Bronze account. Want to cut your commissions even further? Opening up a Gold or Platinum account and paying the $10 or $15 monthly subscription fee will knock your commissions down to $1.50 and $1.00, respectively.
On top of their commission schedule, you can by fractions of shares by using their automated service (buy $100 worth of Google rather than a full shares worth), making trading with SogoInvest that much more attractive to those traders who dollar-cost average their investments.
SogoInvest is founded by William Yeh, who also founded the parent company Genesis Securities back in 1999. Genesis Securities pioneered the Laser technology, which is one of the fastest direct market access systems in the world. Alone, Genesis executes between 2 and 4% of the NASDAQ’s daily volume, and between 1-1.5% of the NYSE/AMEX daily volume. Because of their direct link to the market (read this as pure disintermediation for EvolutionShift readers), they can pass their savings on to the individual SogoInvest trader.
SogoInvest appears to be a great platform for novice traders or those who have a fairly automated investment strategy and don’t follow the market action on a daily basis. Experienced traders used to using advanced tools will find the SogoInvest research tools a bit simplistic, many of which are readily available at Yahoo! Finance and similar financial sites. However, this is what helps keep the commissions and fees low at SogoInvest.
As of today, they have yet to allow users to establish retirement accounts; however this appears to be in the works. In addition, SogoInvest plans on offering education savings accounts, which few other brokers offer.
SogoInvest appears to be the bottom line leader in terms of commissions and fees, has no monthly maintenance fees, no minimum to invest, and the automatic investment feature (which allows you to automatically invest a set amount of money each day, week, month) is particularly attractive for those who want to automate their trading discipline. The ability to purchase fractional shares and dollar-cost average their investment is particularly attractive to those who don’t have their nose stuck to the ticker each passing hour trying to time the market.
With my level of investment knowledge, I do like having access to the advanced tools and research reports provided by TDAmeritrade, but it’s tough to turn down those low commissions. One strategy is to keep my Ameritrade account for longer term holdings and mutual funds, and open a SogoInvest account to do more frequent trading in, capitalizing on the smaller commissions.
One drawback to SogoInvest is the inability to trade or invest in mutual funds. Additionally, for those options traders, SogoInvest is not for you. Neither the website nor the press release addresses the buying mutual funds or trading options (which I fully understand are for the more experienced investor), however I’d like the ability to diversify my portfolio outside of ETF’s and individual stocks.
I’ll get a chance to address Mr. Yeh on Wednesday during an interview in Chicago, and I’ll let you know his response to these issues.
Additional Information
SogoInvest Website
Commission Schedule
Wall St. Journal Article (requires subscription)
CNN Money Article
SogoInvest Launch Wall Street Journal
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Thanks for the "heads up" about the new online trading company.It is about time that someone like me, self employed, intelligent and fiscally conservative had a reasonably priced place to go. I have never been comfortable leaving my investment decisions in the hands of someone else. And who cares that they do not use Mutual funds, I surely do not as I have lost money in Mutual Funds, not earned it. I say, give the power back to the people and that price….. they have got me!
I agree Victoria!
I'm not big into mutual funds, although I have had interest in the past. I do like the ETF concept, and bundle together a few ETF's and you've got yourself a self-directed mutual fund!
I really like the fact that you can set up an automatic contribution. That makes savings discipline much easier, and couple that with a "high yield" stock and you have a recipe for a good retirement account (if managed smartly of course).
Another question I'll have for Mr. Yeh is whether or not DRIP's (dividend reinvestment programs) will be available with SogoInvest.
If anyone has additional questions, let me know as soon as possible!
-Grant
Good post. I checked out SogoInvest after reading about them in WSJ, and so far so good – easy to use, and with sufficient research tools. Since there is no account minimum, I think it's worth it to give it a shot, and if I remember to come back, I'll report back on my experience.
Great Mando! Be sure to check back in and give us an update.
-Grant
For the latest information on Sogo Invest and a transcript of my Interview with William Yeh, see the following link:
http://www.thecornerofficeblog.com/2006/07/14/sogoinvestinterview/
In response to the DRIP program, Sogo Invest does not currently offer that function, however Mr. Yeh assured me that if the account holders want the capability, they will apply it immediately.
-Grant
I agree that this platform is not for everyone. Notice there is a 5,000 share limit per transaction, or pay an additional $0.005 per share for each share over 5k. I suspect this will limit the penny market players quite significantly. BT
Good review of Sogoinvest, however you’ve forgotten one important aspect about it that deserves mentioning. They don’t support dividend reinvestment which is a huge feature to miss out on if they are to compete with Sharebuilder at all. If I had known they did not support it, I would probably not have signed up with Sogo at all.
See my review at http://www.tyroinvestor.com/content/view/18/2/
Thanks
Alex
Alex, if you read my follow up posts, I mention that the lack of a DRIP feature is a huge drawback for Sogo Invest, and is the primary reason I haven’t opened an account with them.
-Grant
I use sogoinvest.. its nice.. very fast trade execution. it might not have all the fancy stuff but at least there are limit orders. the $.005 charge per share on over 5000 shares per trade sucks. i’m also waiting for them to open OTCBB trading, then i’ll have some fun..
This online brokerage firm provides two account types namely SogoInvest and SogoElite. Also its various investment packages – the Platinum, Gold and Bronze give you further options to select what suits your budget and your individual preference. What more, it has strategies to minimize the financial risk. It has the choices of making automatic investments daily, weekly or monthly. More than affordable, you can buy stocks at $3 or less.
SogoInvest not the best.
I’ve been very disappointed with the service at Sogoinvest. You’ll be dealing with many idiots if you have any questions. I sometimes have to ask a question twice to them because they don’t understand stock market terms, and/or English. This is via their messaging system.
After 8 months of depositing money they deactivated my bank account and are asking for me to send a voided check. This is after I’ve verified account deposits, sent a copy of my photo id, filled out multiple forms and given them my SS# when opening my account 9 months ago.
There website has a bug where it will display my positions/balances incorrectly. I’ve reported this bug for 8 months, and it is still not fixed.
There website runs really slow compared to my other account I just opened with Zecco.
They are missing many stocks that I’ve been able to purchase on Zecco.
They are not the lowest commission anymore. Zecco is.
I would recommend you think twice before opening an account with Sogo.
I’m reporting this Sept. 5, 2007. Best of luck.
I have a sogoinvest account and have been fairly pleased with them so far, but yesterday (9-17-07) and so far this morning their website (and my access to my account) seem to have simply vanished.
I wonder if anyone else has noticed, etc. or has any idea how to get in there.
I love the idea of two or three dollars per trade, but unfortunately I’m not a big enough player to make this platform work for me.