Back in July, I had posted about my thoughts on opening another trading account in addition to the ones I currently hold at Scottrade. My aim was to open a new account specifically to lower the fees for smaller investments (less than $500). I looked at various options include Sharebuilder, Loyal3 and Motif Investing.
After much thought and scouring for deals, I decided to open a taxable trading account at Sharebuilder. Sharebuilder is a popular trading site especially among the regular readers of this blog. I was specially interested in their Advantage plan which offers a specific number of automatic trades for a fixed dollar amount per month. In fact, I got an even better pricing plan since Sharebuilder offers special pricing for Costco members. I got the following pricing option:
- Regular trades are $5.95 instead of $6.95
- Automatic trades are $2/trade instead of $3.95/trade
- Advantage plan – 12 automatic trades for $10/month and extra automatic trades are $1 each – This is the key feature that made me decide on Sharebuilder.
Loyal3 was another brokerage that I looked at very closely, but with the Costco pricing plan I decided Sharebuilder was a better option since I am not restricted with Loyal3’s stock selection.
Now that the new account is set up, this is what I am planning.
- I plan to invest with smaller amounts more frequently – preferably weekly. This will also enable me to dollar cost average depending on the market movements.
- Also, at least to start with, I am planning to invest in stocks that I don’t already own. These are stocks that I have been planning to initiate positions in, but haven’t done since I was waiting for better valuations and didn’t want to invest my usual ~$1,500 at high valuations. With smaller amounts (without added fees), I can initiate and build positions in such stocks over a period of time.
- I am planning to invest at least $1,000 each month through Sharebuilder at an average of 2-3 trades per week spread across few stocks.
In addition to this, I will also invest my usual ~$1,500 or so through Scottrade if some sudden opportunities come up.