Random Ramblings

August 7, 2008

Cost Effective Automated Investing

Filed under: finance — Tags: — camotop @ 7:28 pm

I really like the idea of “dollar cost averaging”. I’m looking for advice on how to do this in a cost effective manner. I’m not looking for 401k, or IRA investing — that’s already maxed out and taken care of. I’m looking to invest the money that’s sitting in my savings account, and that’s not assigned as Emergency fund. I’m looking to invest some money once or twice a month (depending on fee schedules — I’m quite flexible, I just don’t like wasting money on fees).

Regular brokerage fees for buying and selling run anywhere from 4-20 dollars. If you’re only investing, say $250 at a time, that’s a large overhead: once for buying, and at some point later for selling. Especially if you’re also selling using the dollar cost averaging technique.

In my research I came across a ShareBuilder review, where people go into some options. Of course, that review is over 8 months old, which in our internet world means it is almost irrelevant.

I like the idea of ShareBuilder — it seems simple and easy, and the $4 buy is manageable, although I’m not clear on the fees on a sell.

Somehow I can’t find myself trusting Zecco — the idea make sense, and I’m sure they are legit, yet with ING behind ShareBuilder, I may have to give them a chance.

TD Ameritrade and E Trade having very nice trading and research tools, but IMHO lack the simplicity that saves me, the casual investor, time and money.

Lastly I could see if I qualify for free trades at my brick and mortar bank, as loyal customer or something, but that seems so …. last century!

I wonder what others have done, and what has worked well, and not so well.

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2 Comments »

  1. First off, I must disclaim that I am an employee of ShareBuilder, but not licensed to give investing advice.
    Yes, you can buy stocks for $4 as part of an Automatic Investment Plan. Such purchases occur on Tuesdays. When you sell, it occurs as a real time trade for $9.95.

    Good luck in your search.

    Comment by Scott — August 8, 2008 @ 2:27 pm

  2. Thanks for the info, Scott. Does ShareBuilder allow me to schedule automatic (e.g. monthly) stock sales ?
    Is there any integration with the ING Direct (checking/savings) accounts and website ?

    Comment by camotop — August 8, 2008 @ 4:26 pm


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