Sharebuilder, how good is it?

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I recently signed up with scott trade but never put the money into the account so technically I am not with them. Sharebuilder's promotion is 4 dollar trades. How good are they?

Sharebuilder Info Link for the Lazy

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Obitron64 said: [Q]I recently signed up with scott trade but never put the money into the account so technically I am not with them. Sharebuilder's promotion is 4 dollar trades. How good are they?

Sharebuilder Info Link for the Lazy

Not very - costs $15 dollars to sell. They limit the number of stocks you can invest in considerably - no Bermuda insurance companies, or many small cap stocks. It is very difficult to find something to buy with them. Hence I switched to Firstrade last week.

They are fine if you are into dollar cost averaging. I've had an account with them for almost five years and I haven't had any trouble. Steve pointed out the biggest problem: not all stocks are available through them. I've been hoping for years that they would change this (even if it meant a list of $4 stocks and a list of $15 stocks) but so far they haven't. The upshot is I've been keeping my E*Trade account open as a backup even though I hate E*Trade.

Steve said it's very difficult to find something to buy with Sharebuilder. That's going to depend entirely on your investment style. All the big names and tons of ETFs are on the list. You won't find many small cap stocks on the list. That's where E*Trade comes in for me. But if you don't already have an E*Trade account, find someone better. E*Trade's main interest is exctracting junk fees from their clients.

If you are planning to sign up with Sharebuilder then look for other offer that give you money for opening an account and contributing to it. For example, if you are a Costco member it gives you $40.00 and 25% rebate on certain fees.

I do not use Sharebuilder much. I only invest $150.00 which is nothing. I loss half of my profit if I sell because it cost 16.00 to sell. I don't like Sharebuilder when I first use it 3 year ago.

I have the Basic plan and you can not buy in real time for $4.00 orders, only on Tuesday at market price once a month I believe and only one stock.

I have not use for a long time and just left my money there. Good part is no inactivity fees. They do require to change your password once every other year. There is also a surcharge for order over 1000 shares.
[Q] Large Order Surcharge: In addition to the Base Commission, a large order surcharge of $0.015 for each additional share over 1,000 shares will be incurred. The total commission (Base Commission + surcharge) is subject to a maximum of 2.5 percent of the principal, but no less than the Base Commission.

For small amounts over time it is good. I had plan on investing 150.00 per month put ran into financial problems and didn't like buying just one stock at a time with high cost to sell. Depend on what is your financial goal. Short selling not good in the Basic plan $4.00. Long term saving might be good depending how much you invest.

Sharebuilder is not for daytraders, short sellers, option sellers/buyers. It is for people who want to build up a portfolio over time.

If you have a limited amount of money to invest each month, Sharebuilder is great. It's true that they don't have all companies available, but they have over 4,000. If you can't find something to buy you are probably more of a gambler than an investor. One of the requirements for a company to be listed is their volume. This helps out the investor by providing high liquidity stocks in which to invest.

It's true they only purchase on Tuesdays, which takes away some of the control over your purchase price, but you can check the price of your stock on Monday morning. If you don't like it, don't place the trade. Wait until a Monday morning price is where you'd like to buy. I realize that anything can happen during the 24 hours prior to purchase, but this does give you a little more control over the price.

If you have enough spare money to purchase a significant amount of stock, then firstrade may be the better choice.

If your only investing less the $100.00 a month, that $4.00 fee can really bite. With every trade your loosing $4.00 a month. I only use sharebuilder to initiate DRIPS. For example instead of me shelling out $ 500.00 to start a JP Morgan drip, i instead built up the 1 share requirement. Tranfered that 1 share into my name and transfered it into my drip. I circumvented the $500.00 investment (it could be lower, i did this a couple of years ago) The share of jpm and the certifiate fee were free since it all came from rebates from sharebuilder card!

Buddino said: [Q]If your only investing less the $100.00 a month, that $4.00 fee can really bite. With every trade your loosing $4.00 a month. I only use sharebuilder to initiate DRIPS. For example instead of me shelling out $ 500.00 to start a JP Morgan drip, i instead built up the 1 share requirement. Tranfered that 1 share into my name and transfered it into my drip. I circumvented the $500.00 investment (it could be lower, i did this a couple of years ago) The share of jpm and the certifiate fee were free since it all came from rebates from sharebuilder card!
It's true that you do have to consider the commission, but that goes with any broker. I personally wouldn't invest less than $200.00 at a time. You don't have to make a purchase every month, so just wait until you have saved up at least $200.00.
Buddino does have a point. If you have very little to invest each month, it would be better to get into a DRIP.

Buddino said: [Q]If your only investing less the $100.00 a month, that $4.00 fee can really bite.

They do have other investment plans that cost much less per stock. I've been using sharebuilder for about 3-4 years and love the concept. I use the $20/month plan and purchase 5 stocks weekly, so I'm only paying $1 per transaction.

I use sharebuilder exclusively for ETFs now, and use it as a very easy way to dollar cost average while keeping a balanced asset allocation.

why not interactive brokers? $1 per trade up up to 100 shares

didYOUsearch said: [Q]why not interactive brokers? $1 per trade up up to 100 shares

I haven't looked at Interactive Brokers, but for me sharebuilder is like that Rotisserie chicken cooker that Ronco is always selling on late night infomercials. "Set it and forget it."

I've been using them for my Roth this year. So far so good!

dandan14 said: [Q]Buddino said: [Q]If your only investing less the $100.00 a month, that $4.00 fee can really bite.

They do have other investment plans that cost much less per stock. I've been using sharebuilder for about 3-4 years and love the concept. I use the $20/month plan and purchase 5 stocks weekly, so I'm only paying $1 per transaction.

I use sharebuilder exclusively for ETFs now, and use it as a very easy way to dollar cost average while keeping a balanced asset allocation. For you its cost effective in that regard. IF you have more to invest then sharebuilder is great. If your only investing 50 a month then its a waste! Since you loose roughtly 8% each month!

Buddino said: [Q]If your only investing 50 a month then its a waste! Since you loose roughtly 8% each month!

Yes. Absolutely.
For those investing $50 per month, finding a no-cost route is the only way to go. Drips are ok in that they are free, however, most drips that I am aware of invest only in one company...which from an allocation standpoint is really risky. Perhaps a better option is to find a broad mutual fund (Wilshire 5000 perhaps) with a low minimum, and send a check or setup autodraft.

Sharebuilder is not a trading platform - it's an investment strategy.

Buddino said: [Q]If your only investing 50 a month then its a waste! Since you loose roughtly 8% each month!

If you only have $50 per month to invest, then invest $200 every 4 months. You are not required to invest every month with sharebuilder. By investing $200 every 4 months you are able to get your commission rate down to 2%. DO NOT invest small amounts (less than $200) every month.

If you really want to go the "fractional shares" route I suggest you also look into FolioFN.com. I've used both and although I've "graduated" to traditional brokers, I would recommend Foliofn.com.

- Their Bronze ($19.95 p/m) plan allows 200 free window trades a month. Sharebuilder allows only 20 free trades with their Advantage ($20.00 p/m) plan.

-If you just sign up for FolioFn's basic membership, then window trades are $4.00 each and there is no monthly membership to pay (Sharebuilder's basic service also has no monthly membership fee).

-FolioFN allows you to buy and SELL through window trades (included in your membership). Sharebuilder makes you use the more expensive market trades to sell your stocks. If you ever consider tranfering your shares to a traditional broker, you will need to sell your "fractions of a share." Most brokers will only accept full shares. That means that with sharebuilder you will have pay the full market order commision just to sell your fractional shares before you can transfer your full share out. 1/4 Shares of MSFT is worth about $6.30, but your cost to sell it with Sharebuilder will be $15.95. With FolioFN you can just use you free window trades to sell your fractional shares.

-FolioFN has daily window trades. With Sharebuilder you have to wait until Tuesday.

- FolioFN has better (and free) tax tools. Sharebuilder advertises free "Gainskeeper" service, but what they are really giving you is a trial membership. This is important because at the end of the year you are going to have hundreds of transactions and calculating your gains/losses is almost impossible when dealing with fractions of shares.

I think the worst thing about these services is that their fees really do eat into your gains. It's true that you can bring your costs down by investing more money. Rule of thumb: wait until your commissions are about 1% of what you are investing (this would be in line with buying into a mutual fund). So if you are using their basic service, you should really wait until you can invest $400.

The sad thing is that they market their services to the "small" investor who is only able to invest a little at a time. My feeling is that if you can do $400 trades, then you are better off waiting a little longer and doing a $700 trade with a traditional low-cost on-line broker (Firstrade, Scottrade, Ameritrade, etc). You will at least have greater control over you securities.

Dccarney said:

[Q]If you only have $50 per month to invest, then invest $200 every 4 months. You are not required to invest every month with sharebuilder. By investing $200 every 4 months you are able to get your commission rate down to 2%. DO NOT invest small amounts (less than $200) every month.

You forgot to mention only sell when you are at $1000 so the commission rate stays down to 2%. Don't forget to include $15.95 Real-time Trade market orders to sell plus the the initial $4.00 to buy.

Or sell when you have $1,200 so that $19.95 Real-time Trade limit orders plus the initial $4.00 you stay at 2%. 19.95+4= 23.95/1200= 1.995%.

dandan14 said: [Q]Buddino said: [Q]If your only investing 50 a month then its a waste! Since you loose roughtly 8% each month!

Yes. Absolutely.
For those investing $50 per month, finding a no-cost route is the only way to go. Drips are ok in that they are free, however, most drips that I am aware of invest only in one company...which from an allocation standpoint is really risky. Perhaps a better option is to find a broad mutual fund (Wilshire 5000 perhaps) with a low minimum, and send a check or setup autodraft.I started slowly.. I drip Heinz, Conagra, General Electric, Jp Morgan and coming up is Home Depot.

There is also buyandhold.com I like it better because when I decide to get out, Selling does not cost more.

$6.99/month for 2 window trades a month (buying or selling) you can set them to anyday of the week at 3 different times a day
$14.99/month for unlimited trades.

Real Time trades are $15/each.

With their E-Z vest system, you can "set it and forget it" also. When I had more disposable income I had ~$500/month invested in 6 stocks. With the unlimited plan I was able to buy some stocks once a week and others once a month without worrying about the cost of each individual trade.



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