Comments on: My First Stock Purchase

By: Mike

Mike — Sun, 01 Mar 2009 07:42:01 +0000

I have a Schwab brokerage account– though these days I normally use my Interactive Brokers account, which charges $1.00 (not a misprint) for a real-time US trade (and somewhat higher, but still very reasonable, rates for Hong Kong, Japan, Europe, Canada, and Australia trades). I like Schwab, too, though, and have considered getting their credit card because 2% cash-back beats the 1% cash-back my current card gives me.

But I have to say, it doesn’t make a lot of sense to spend $12.95 (or $8.95 in my case, because I have over $100k in my Schwab accounts, so I get a better price on trades) to purchase less than $30 of stocks. Just in case you haven’t figured it out, you know you COULD combine some of your own money with that $38– it’s still, in that case, a free transaction plus $20+ worth of stock. Or you could let the money build up for a while before purchasing anything. But why squander $12.95 on less than a $30 purchase?

Or, keep in mind, one of Schwab’s great benefits is they offer a “CD marketplace”– so you can buy CDs for virtually any time period, from a wide range of banks, right within your Schwab brokerage account. So you could buy a $1000 CD each month and let your cash-back provide $38 (or whatever) of the seed money.

(Or, obviously, as you say, you could simply transfer the money out of the account).

By: thomas

thomas — Sun, 01 Mar 2009 06:58:25 +0000

You are killing yourself buying so small of amounts with a high purchase cost. at $25 to buy/sell. With 3 shares, you need the ETF to gain $8.34 to just break even. Looking at the ETF price now you are asking it to more than double to just make your costs back.

You are better off transferring that money to ING or something with the level of money you are working with.

Also, losing free money still sucks.

By: SimplyForties

SimplyForties — Sat, 28 Feb 2009 01:32:15 +0000

Good choice! Take a look at PBD. Somewhat similar but not so solidly in the “wind market” and with some international holdings. Overall I think it’s been doing slightly better than PBW.

By: Rassah

Rassah — Fri, 27 Feb 2009 20:21:08 +0000

It lost a lot of value in the last year since I bought it, but I spent my “free” money on PWE. It’s a Canadian oil trust. It dropped from high $20′s to about $10 due to drop in gas prices, but I didn’t buy it for growth, I bought it for the dividends, since at the time it was offering about %12 annually, paid in part each month. Funny thing is, despite the HUGE drop in stock price, the dividends remained about the same, which means they’re paying %24 in dividends on a $9 stock. Don’t know how long they’ll be able to keep that up, and I guess $9 would make this stock really cheap in the mean time… Just a tip :)

By: Smithee

Smithee — Fri, 27 Feb 2009 18:25:40 +0000

I agree that $12.95 is a lot. I think ETFs are more expensive than regular stocks.

My other option would be to move the money from the brokerage account to my checking account, and then the same amount from my checking account to a different brokerage. I might decide the hassle is worth it in the future.

By: Llama Money

Llama Money — Fri, 27 Feb 2009 18:17:58 +0000

I know it’s free money, but $12.95 for a stock trade ( buying and selling – that’s $26 bucks ) – yikes! Zecco runs $5 a trade, and I think Trade King is about the same. Even with free money, I’d have trouble paying almost triple the price for trades.

By: Matt SF

Matt SF — Fri, 27 Feb 2009 17:08:00 +0000

Aspiring hippie… I like that. I’m a reluctant treehugger myself. PBW is a solid choice, especially with the current administration’s policy towards alternative energy.