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Author: joelcorley Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 50252  
Subject: Re: Selecting a broker Date: 7/30/2012 10:50 AM
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You wrote, For smaller amounts, dividend reinvestment programs can work well. They allow you to buy more of the same stock for a proportionate share of the commission.

I assume you mean a direct corporate DRiP? I've never seen a broker's dividend reinvestment program that allowed you to buy more stock (beyond the amount in the dividend) without paying a commission.

BTW, the OP should look into commission-free ETFs. In my earlier years, funds were considered a better choice than buying blocks of individual stocks at a broker. With a mutual fund you can accumulate capital in a few funds without incurring commissions, then switch to individual issues after you've accumulated a core investment portfolio.

These days ETFs usually have lower expense ratios than regular mutual funds, so it might be best to apply this strategy in your early years to ETFs at a broker that offers a decent commission-free ETF list. As far as I'm aware, Vanguard, TD Ameritrade and Fidelity offer pretty decent commission-free ETF lists. When you have a decent amount of seed capital, branching out into individual investments makes more sense.

- Joel
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