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Brokerages look to just break even

Top three online brokerages seeking to help their clients preserve capital.

NEW YORK — Breaking even has never sounded so good.

As a once-bull market boom extends its descent into bear market misery, the Big Three U.S. online brokerages are having to rewrite their sales pitches. While Charles Schwab, E-Trade, and TD Ameritrade used to talk about making money for investors, now in the credit crisis era, it’s instead about preserving capital.

“Active traders today aren’t swinging for home runs anymore, they’re happy with base hits,” said Joseph Vietri, vice president of Charles Schwab Corp.’s active trading and investing services.

Indeed, the focus is just navigating choppy market conditions. The Dow Jones industrials are off more than 6.7 percent for the year, and since the start of the month have jumped sharply one week only to pull back the next.

This zigzag pattern has caused brokerages to begin pushing everything from risk management tools to investment seminars for wary investors. Advertising that once touted super-fast trades and reduced fees now promote defensive measures to help protect assets.

Ameritrade’s pitchman, actor Sam Waterston, star of “Law & Order,” is preaching the wisdom of mutual funds in TV commercials. His sober countenance is a far cry from Stuart, the young tattooed punk who tried to teach his elders about beating the market, “socking it in the guts, holding it upside down and shaking the change loose,” in commercials that helped establish Ameritrade’s reputation with millions of investors.

“We’re running more television spots toward risk management, things to stay more disciplined,” said Jay Pestrichelli, senior vice president of the trader group at TD Ameritrade Holding Corp. “For those bold enough to trade in this market, I’ve talked to traders who say you’ll need to work twice as hard to make half as much money.”

Online brokerages are trying to remind customers about some of the conservative strategies that can be used in tough markets. They’re all promoting risk management software designed to help investors determine if their portfolios might be overexposed in certain sectors, and even how to diversify.

Alternative trading strategies are being highlighted to take advantage of volatile markets – especially investments in options contracts. The brokerages have reported a surging interest in stock options, which allow investors to bet if a stock will move lower over a period of time.

Bonds – once considered a complicated market for retail investors to traverse – are also becoming easier to buy online.

Online brokerages are trying to remind customers about some of the conservative strategies that can be used in tough markets.

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