Editor's Outlook

Quicken Versus Money

Wayne Thorp provides a head-to-head comparison of the latest versions of Microsoft Money and Intuit’s Quicken. These programs try to be the equivalent of the Swiss Army Knife in the world of financial software by offering a complete array of tools for budgeting, planning financial goals, tracking income and expenses, and managing and researching your portfolio.

Microsoft and Intuit compete fiercely against each other and offer annual upgrades to draw in new users and try to get users to switch from one program to the other. While it is debatable whether the current version of either program offers a compelling reason to switch from one program to the other, users of both Quicken and Money benefit from the competition.

Microsoft and Intuit would also like you to believe that their programs offer everything needed to manage one’s finances. While these programs will satisfy the needs of many investors, you still need to examine your specific investments and portfolio complexity to determine which program, if any, will meet your specific needs. My Swiss Army knife is perfect when I go camping and need to cut some fishing line or open a bottle of beer, but I would prefer a more powerful tool if I needed to cut down a tree or fight off a bear.

Discount Broker Comparison

Our annual comparison of on-line discount brokers lists 47 brokers this year. Three years ago, we listed 77. On-line brokers are clearly past their period of growth and expansion at any cost. Today the focus seems to be specialization and consolidation.

Twenty years ago, discount brokers such as Charles Schwab took business away from full-service brokers by offering stock, mutual fund, bond, and option trading for commission rates below those of the full-service firms. Today, even leaner deep-discount brokers are stealing business away from old-line discount brokers such as Charles Schwab. The On-Line Discount Broker Comparison covers a range of brokers. Your investing style, typical holding period, and investment knowledge help to determine which broker is best for you. If you trade frequently, then you will probably want to focus your search on the deep discount brokers, or even consider a broker that has a monthly fee, but very low commission schedule.

Of course, trading costs go beyond brokerage commissions. Quality of trade execution is just as important— factors such as the price at which an order was filled, whether the broker was able to shop around for a trade within the quoted bid/ask spread (known as price improvement), the speed at which the order was filled, and even the likelihood that an order will be filled when it is entered. All of these factors are intertwined and involve some level of compromise. But attempting order improvement may result in a slight delay of execution.

Placing a trading order is bit of a science. Intelligent use of limit orders and simply watching the intraday price movement of a stock goes a long way toward getting better fills. But don’t lose track of your trading horizon—if you’re planning on holding that stock for the long term, will losing an eighth of a point make that much of a difference?

The On-Line Discount Broker Comparison should offer a number of brokers that match up with your needs.