Zecco & Investment Strategies
I’ve had a regular investment account and a Roth IRA with Zecco.com for a few years now, and they’re by far my favorite online broker out of the several that I’ve tried. I find their web site easy to use, and they’re always very helpful when I call. But they’ve recently changed their pricing, which means that I may need to change my investment strategy.
Previously, they offered 10 free stock trades per month if your account qualified. Since I usually did fewer than 10 trades a month, that was perfect for me. No fees on my trades! But they’ve made a change, and eliminated the free trades. Zecco’s commissions for stock and ETF trades are still super low, and their mutual fund fees have stayed the same, which is great, but the elimination of the free trades is not so great for me.
You see, in addition to a few mutual funds, I have about 50 different stocks that I like to keep at the same cost basis — meaning I have close to the same dollar amount invested in each stock. I try to buy about $100 more of each stock each year, so that I’m diversified across industries and companies. While slow, this has worked out fine because I haven’t had to worry about commission costs. But now those same trades will cost me close to $250 per year if I keep the same strategy.
I may need to switch to buying larger dollar amounts of each stock — say $400ish per month — but that’ll mean it will take me more than 4 years to get all of my stocks “even” cost-basis wise. At $400ish per month, the trades would cost me about $60 per year, which seems reasonable. Or I could go to $200 per month, and spend around $120 per year. I’ve just got to weigh how important it is to keep my cost basis similar across stocks compared to how much the fees will eat.
On the other hand, maybe I should be focused more on the market value of my stocks, which is by no means “even” or close to even across all 50 stocks. (For example, at the time of this writing I have both FMCC and Netflix, two stocks on opposite ends of the spectrum market value-wise.) But since I generally use buy-and-hold, trying to keep them at similar market values would either take forever or generate even more trades.
What kind of investment strategy do you use, and what’s your reasoning behind it?