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Choosing A Broker For My Needs: FolioFn, SogoInvest,ShareBuilder,BuyAndHold?

Hey!

At this time I am looking to throw 100-300 a month into investing. FolioFn,SogoInvest.Com,BuyAndHold,ShareBuilder, etc interest me due to their ability to do automatic investing, fractional shares, etc. So far, it seems SogoInvest.Com might be the better deal as while now I am just interested in setting up my own automatic investment plan much like FolioFn does with a make your own Mutal Fund of sorts however in the future, with more money comming in, I might become slightly more active as a trader instead of just buying and holding (isn't that called Dollar Cost Averaging?), so sogoinvest.com seems to be able to accomodate that.

What services would you reccomend I use? Sogoinvest? FolioFn? Sharebuilder? Buyandhold? other?

However, this are the words of a newbie, one who has only been research for the last few days.

Now, I turn to Microphone over to the "experts"

Testing one two three......

Reply to
JBickings
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I (and I suspect most here) will offer you this; You would need 30+ stocks to properly diversify away a good chunk of individual stock risk. If you had $250K+ in an account and said you were willing to put in the homework, and frequent monitoring, you'd stand a chance to do as well as a low cost index fund. I suggest you choose a broker who offers an S&P fund with a cost of .10% or less and buy in. Once you have about $5,000, start to buy a low cost small cap fund, then an overseas fund.

"$100-$300/mo" and "individual stock picking" are contradictory. Let's see how others reply. JOE

Reply to
joetaxpayer

OK, I'll be the first, these are not contradictory. But "$100-$300/mo" and "diversified portfolio" may be (until the portfolio gets larger), as well as "$100-$300/mo" and "buying shares every month." I started out at individual stock picking at $100-$200/mo, but I typically only traded once per year or less, and I was certainly not diversified.

-Will

Reply to
Will Trice

I think Joe's advice is reasonable. But suppose the OP is a man in his early 20s who has just started to invest. If he invests $300 the first month in stock ABC, and that is his entire investment portfolio, it is true that his investments are quite undiversified. However, the $300 probably represents a very small fraction of his future lifetime savings. (If it does not, he is in trouble no matter how he invests.) If he invested $300 in a different stock every month, he will have a diversified portfolio in a few years. Investing in individual stocks can yield good after-tax returns if one harvests tax losses, as discussed recently here in another thread.

I don't know what the brokerage fees are for the monthly investments contemplated -- that is an important consideration.

By contrast, a 65-year old would be crazy to put his entire account in a single stock, since the account probably represents his entire lifetime savings.

Reply to
beliavsky

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