Timeline for Finding a Brokerage for Dollar-Cost Averaging
Current License: CC BY-SA 2.5
7 events
| when toggle format | what | by | license | comment | |
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| Mar 23, 2011 at 16:49 | comment | added | James | I'm speaking of a mix of things. A majority would be ETFs and a smaller amount would be speculative investments. I also have a TD account and have access to the free ETF trading. That being said, I find there is huge value to the hands-off, automatic approach. Also, it's hard to really cost average into instruments with a high share price without fractional shares. I recommend that you estimate expenses for your monthly allocation and investment timeframe. The resulting best choice depends on those two parameters. | |
| Mar 23, 2011 at 16:00 | comment | added | JCotton | @James what investments have made the most sense using ShareBuilder? are you going with ETFs, index funds, a mix, others? Many brokerages advertise to 'traders'. I'm going for 'automatic investor'. | |
| Mar 23, 2011 at 15:16 | comment | added | James | You get 12 automatic investments for a flat $12/month fee, with additional automatic trades being $1. For the $200 per paycheck case, this probably doesn't make sense. However, for larger values over the long term, the $12 one-time fee is dwarfed by the cumulative fees of a mutual fund. | |
| Mar 22, 2011 at 19:23 | comment | added | bstpierre | It is trivial to get a better deal than $4/trade: if you invest in index mutual funds through an automatic program it will be completely free. (Whether it's directly through the company, e.g. Vanguard or through a broker, e.g. TD Ameritrade as mentioned in my answer.) That $4 is $104/year assuming one trade per biweekly paycheck. If you're putting in $200 per paycheck that's an immediate 2% loss -- worse if you're putting in less. As trip0d199 mentions, you have to pay $10 to sell, though if you're doing index ETFs long-term you probably won't sell frequently enough for it to matter. | |
| Mar 22, 2011 at 14:02 | comment | added | James | That's true. It's still difficult to beat that deal, even with the commission. | |
| Mar 22, 2011 at 12:38 | comment | added | trip0d199 | One point to add about sharebuilder - compare the fees closely. While you can invest automatically for $4 a trade (or less if you get a plan), you will have to pay the commission on a real-time trade ($10) to sell any stock. If you are perusing a buy and hold strategy, this may not be a problem. But you should always think about the costs of getting your money back from an investment before you start putting money in. | |
| Mar 21, 2011 at 20:05 | history | answered | James | CC BY-SA 2.5 |