My Roth IRA retirement account is handled by Sharebuilder.com. One of the quirky features of using Sharebuilder is the fact that they restrict your automatic investment purchases to Tuesdays. While this may seem like a negative to those of you who (foolishly) try to time to market to buy at the lowest possible price point, Sharebuilder's reasoning is that, from their point of view, placing all trading orders in one lump sum significantly reduces trading costs; savings can then be passed on to their clients. (Besides, one should not be concerned with trying to time the market when investing for the long-term.) While I have thought about switching my Roth IRA over to Zecco.com, due to Zecco's zero-fee trading platform, I have actually been rather pleased with the user-friendliness of Sharebuilder's site and its orientation towards beginning investors who wish to dollar-cost-average their investments.So tomorrow is my investment Tuesday, and I will be purchasing $271 worth of iShares MSCI EAFE Index Fund (NYSE: EFA). $271 may seem like the very antithesis of a nice, round number, but often I will make random, extra contributions to my IRA to satisfy my urge to splurge without wasting my money on frivolous things. Up until a couple of months ago, I had been dividing my regular Roth IRA contributions equally between the four funds that make up my portfolio (EFA, IWM, PEY, and SPY). I recently began trying to purchase only one fund a month, in order to reduce trading costs. It has been a while since I purchased any EFA, since that fund has had the highest growth of my four funds, and I am trying to buy more of those investments that are lagging behind (buy low, sell high, remember?). But this month it is EFA's turn to be on the bottom and get its monthly "top off," so to speak.
2 comments:
Hi Zachary! Thanks for visiting my site. I can relate to your situation as i too started managing my finances recently and i am in the process of educating myself. Would like to see book reviews on any books pertaining to personal finance that you have read.
I used sharebuilder many moons ago. I actually have my roth ira with firstrade. The commission is $6.95 and so it definitely isn't the least expensive, but it's full service brokerage and has no minimums. There are some new ones that have cropped up like sogoinvest.com
I also have an account with buyandhold. It's not an IRA though. The only thing i don't like about them is you have to pay $6 or so a month whether you trade or not. I always make 2 trades a month so it pays off for me I suppose but if I wanted to stop trading for a little while, I would still have to pay the $6/mo.
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