There is a way to regularly invest monthly contributions without large brokerage fees. I don't recommend that you do this unless you are comfortable with the associated risks. There is also a nice tax benefit which you might be able to take advantage.

First, buy the stocks (in Jan, e.g.) on margin. Every month, pay part of the margin off. At the end of the year, the margin is gone (since you divided up the stock purchase over 12 months). This reduces you transactions costs to just one/stock/year.

As an added benefit, margin interest is tax deductible in a couple of cases. From what I read it can get complicated. The simplest case is washing margin interest with investment income, if your margin interest is less than the dividend income. So, if you paid $400 in margin interest and had $500 of dividend income, you get to wash $400 of dividend income with the margin on your taxes.

Using this method is absolutely the way to go if you are investing in quality growth companies. You will miss out on a lot of growth if you have to wait the whole year to be fully invested.

If you want to invest in an S&P500 index, you can buy SPY on margin just like other stocks. However, the above method is probably better suited to a more aggressive investment strategy.

rustedSoul