Archives for December 2005

I am warming up to my idea of making a separate brokerage account for all of the free money I’ve gotten from banks, brokerages, and credit card companies. After some preliminary research, I’m leaning very heavily towards one broker – MB Trading, as they feature:

» $2,000 minimum to open.
» No minimum balance fees, no minimum commissions per month.
» Per-share stock commission of 1 cent per share up to 500 shares, and 1/2 cent per share over that. The minimum commission is $1. This means as long as you are trading less than 100 shares, you’re only paying $1 a trade!
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A good discussion came up in my previous post on my IRAs – Should I invest the $4,000 earmarked for my 2006 Roth IRA contribution all at once in January, or dollar-cost-average it over the entire year? Dollar Cost Averaging (DCA) involves investing a fixed amount at a regular interval. For my $4,000 example, I could invest $335 a month, every month, for 12 months. The idea is to buy more shares when the price is low, and and less shares when the prices are high. Sounds good, right? Maybe.

This question actually came up last year, but I didn’t research it very much. My own thoughts were that because the markets trend upwards overall, if you are investing for a long-term period you should get your money in as soon as possible. Sure, you might run into a huge drop, but you could just as easily (in fact more easily) miss a huge rise. But this is too hand-wavy, as scientists would say. I want numbers. So I found some.
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I really only glance at my stock portfolio about once every other day, mostly to check that nothing has imploded. My desire to be a knowledgeable stock investor fizzled after reading books about index funds and how people much smarter than me can’t beat the market. But I still have my “play money” stock portfolio, which I started with $5,000 back in 2001. It’s now at about $5,690 (publicly tracked here), and I’m still beating the S&P 500 since its inception. Just call me a slightly lucky monkey throwing darts.

I noticed today that Scholr Pharmaceuticals (DDD), a stock I bought after minimal initial research, was finally above my buy price of $4.80 due to some buzz about a potential buyout. Since buying the stock, I did a bit more reading and am really not impressed with the company after all, so I took this opportunity and sold my 100 shares at $5.25.
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