E*Trade Has Useful Advertisements!?

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I was reading CNN Money over the weekend when I saw one of E*Trade’s latest banner advertisements, which I’ve included below. I want to salute them for using advertising that is actually useful.

Useful advertising?!?

It’s pretty obvious, with interest rates so low, that dividend stocks have become more and more enticing. Part of me wonders if we’re having the Time magazine effect, which is my leading indicator that something has jumped the shark, but I still think that buying a bunch of dividend yielding stocks is probably your best bet if you’re able to hold them for a while (and cash the dividend checks).

I used to use E*Trade a lot, before TradeKing and $4.95 trades came along, because I was able to link my E*trade high yield savings account to my E*trade brokerage account. When they did away with the bank, selling them to Discover, I saw little reason to keep a bank yielding so little. When I didn’t have the savings account at E*Trade, I initiated the transfer of my brokerage assets to TradeKing, who was going to charge me a lot less per trade.

I hope more companies start going in this direction with their advertising. I think people can appreciate useful advertising more than straight up promotional ones.

{ 18 comments, please add your thoughts now! }

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18 Responses to “E*Trade Has Useful Advertisements!?”

  1. cubiclegeoff says:

    I think it’s an interesting approach since they can’t really talk about how much cheaper they are than other brokerages or anything, like how others advertise.

    • Born Again says:

      Does anyone know of a free financial news service that is relatively fast that I can use to trade with?

  2. Bart says:

    The yield would mean a lot more if the stock price would not get hammered during the next bear market. Of course, the yield would go way up temporarily, but the stock price would take another hit when the dividend is cut.

  3. nickel says:

    Bart: There’s always a “next bear market.” Are you avoiding stocks entirely?

    • Bart says:

      Not avoiding stocks entirely, but I feel much more comfortable using managers that have flexible investment mandates that can go long the market/hedge against the market when necessary.

  4. nickel says:

    P.S. I think those ads are kind of cool, but at the same time they are probably a good indicator that dividend stocks are the flavor of the month.

  5. Glenn Lasher says:

    Please pardon my ignorance . . . What is the Time Magazine Effect?

    • Jim says:

      By the time something is popular enough to show up in a magazine, you’re too late. 🙂

      • eric says:

        That’s kinda what’s keeping me from taking the dive. I can’t differentiate the good from the hype just yet. 🙂

  6. zapeta says:

    Interesting to see that dividend investing has gone mainstream. I’ve been putting money in to quality dividend stocks for a while and will continue doing so.

    • Bart says:

      I wouldn’t really say dividend plays have gone “mainstream” but rather it is being used as a sales tactic to induce people to make a purchase because they are sick of the paltry yields on fixed income and money markets.
      The sad thing is that most of the high quality dividend and quality stocks in general have not participated (for the most part) in the rally since March of 2009.

  7. Mike says:

    My dividend stocks yield a lot more than that. Not all of them are Reits either.

  8. govenar says:

    It doesn’t seem like this advertisement would do much to help E-Trade get more customers though. But I do like their Super Bowl commercials.

  9. When talking about dividend stocks being worth it, you said it’s best if you can hold them and “ash the dividend checks”. Wouldn’t it be better to set them as auto re-invest? I don’t know if all trading groups allow that, but I use Sharebuilder, and they let me re-invest all my dividends automatically for free. Aside from the obvious compounding benefits, I think there may be tax benefits as well for retirement accounts. I’m not a tax guy, but I think that if you re-invest them rather than cash them out, they can continue to grow tax free (in the proper IRA accounts).

    • cubiclegeoff says:

      Even in taxable accounts, reinvesting increases your baseline (not the correct word, but I can’t think of it at the moment), decreasing capital gains when you sell.

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