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I am starting out with $1000.00 and can put $800-&1500 more in each month. There are so many "recommendations" and "Hot" stocks each day, week, month on Fool...you know them.....WFMI, MKL, UMPQ, DFS, AAPL.

So, do I buy a couple shares of this and a couple of that every two weeks or monthly or do I save up and buy $2000 or $5000 of only one hot/highly touted stock at one time? Mix it up with a few or buy one in bulk each month?

I am looking at long-term strategy 5-10 yrs and want/need the biggest bang for my buck.

Confused and not very experienced at this game. Looking for a solid plan to stick with.
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So, do I buy a couple shares of this and a couple of that every two weeks or monthly or do I save up and buy $2000 or $5000 of only one hot/highly touted stock at one time? Mix it up with a few or buy one in bulk each month?

It is important to be aware of and manage your commissions carefully. The total of commissions (buy and sell) should be less than 2%, and preferably less than 1%. That means that for a commission of $7.00, each stock purchase should be more than $700, and preferably more than $1400.

Also be aware that in a retail, non-retirement account, each purchase and sale has tax implications that require good record-keeping.

Doug
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Look at the commission you pay relative to the blocks you buy in. For me it's $8. Thus, if I buy a block of stock for $800, my commission is 8%. Now let's suppose that was a $8 per share stock, and I got 100 shares. That means that my cost basis in the stock is actually a little over $8 per share. It sounds like something you don't notice but 1% of your return is a precious thing not to be easily cast away.

Bigger blocks dilute commission better, at least up to the point where the block is so large they charge you per share. At your level, I would not buy a block worth less than $1000. That at least reduces the commission bite below 1%, which is a bit less painful (and a bit counts).
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Why don't you look into DRIP's. Some of the companies you mentioned aren't available, but there are many that you pay no fees at all. Some charge nothing to enroll in the program, no purchase fees and no dividend reinvestment fees. Even if you enroll in some that have fees, some only charge $1 for a direct debit from your account each month. This would save you heavily on fees and more would go into the purchase of shares, and fractional shares. You'd be able to spread that $800-$1500 a month into many great companies, plus you get the additional dividend reinvestment growth.
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Why don't you look into DRIP's. ..plus you get the additional dividend reinvestment growth.

You also have more record-keeping to do and if you want to sell, it could be a slow process. You may also have to pay a fee to move it to a regular brokerage account or to get certificates.

I also think the fees to buy stock through drips may even be more than the discount brokerages charge these days.

rad
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No. of Recommendations: 6
Buy an S&P500 Index Fund until you have about $50,000 total saved. Then you can start dabbling into individual stocks.

JLC
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schwab.com has several index funds with a minimum intitial investment of just $100. I am in a similar situation as you. I recently started buying the schwab S&P index fund and their international index fund. The intial investment is $100 with a minimum of just $1 for further contributions. There are no fees and the expense ratio is low. I have set up automatic investments twice a month to dollar cost average.
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A lot of companies will issue you certificates for free upon request. Unlike some brokers which have quoted me $40 per certificate.

As for fees, it's why I suggested looking into those with no fees....PFE, XOM, LMT, etc. They charge nothing to enroll, nothing for continued investments, nothing to reinvest dividends. Some only charge $1 for direct debit.....GE, WMT, IBM.

I think some even offer buying/selling over the phone, but charge fees for the service, but you'd pay that anyway with a broker.

Not the best option for everyone, but an option to consider if the companies you are interested have fee free programs.
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<A lot of companies will issue you certificates for free upon request. Unlike some brokers which have quoted me $40 per certificate. >


But how will you cash/sell that certificate? The company will use a transfer agent that may still charge you $40+ process that certificate. Additionally, it can take weeks, if not months to process some certificates. I just helped a client get rid if 7 shares of AT&T and it took 9 weeks for the transfer agent to finish processing it due to all the splits and mergers. If that was in a brokerage account, it could have been sold that day.

Lastly, certs can be lost and if you die, it will also cost money to get it re-issued and/or processed into someone else's name. Last I checked, Computershare (large transfer agent for many DRIPs) charges 3% of the value to replace lost certs.
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I don't deal with a transfer agent, so I can't comment on their services and prices, but how do these prices differ from using a broker? If you have these services performed by a broker, they will charge you too. Though some companies when you are in their direct program will not charge you. For example, I can transfer some of my Disney shares to someone else, free of charge. They will issue me certificates, which I don't want to hold so I keep my shares as book entry, free of charge. If I did have them issue me a certificate for my shares, could I not open an account with a broker and mail them the certificate? To even obtain certificates from a broker you need to pay them to change them to your name and issue. If you lose those shares will they not charge you as well?

The reason I suggested looking into DRiP's was due to the monthly investments and the longer timeline, 5-10 years. They also asked to get 'the most bang for the dollar'.

DRiP accounts aren't instant trades, so you do have to deal with time issues, but some companies have purchase days weekly, bi-weekly and monthly. They need to look into the program and see if it fits what they are after. But to completely throw out the possibility of fee free investing because of possible charges, that a broker would charge you too, isn't the best path either.
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I don't deal with a transfer agent, so I can't comment on their services and prices, but how do these prices differ from using a broker? If you have these services performed by a broker, they will charge you too.

My broker allows automatic dividend reinvesment for free on companies that allow such. No cost. We use the same transfer agent as Fidelity does - National Financial.

We do charge for the processing of certificates (as any broker/transfer agent will do) at $50 a cert - I am authorized to waive/eat that fee at my discretion.

For stock already in an account, there is no cost for the processing of change of ownership, splits, or mergers so there is no delay (everything is done electronically).



They will issue me certificates, which I don't want to hold so I keep my shares as book entry, free of charge.

Free of charge for you, but it will cost the other person to put them into deposit in many cases.


If I did have them issue me a certificate for my shares, could I not open an account with a broker and mail them the certificate?


Yes, but they may charge you to deposit it.

To even obtain certificates from a broker you need to pay them to change them to your name and issue. If you lose those shares will they not charge you as well?

Yes, the transfer agent (the company that issues the certs, not the broker) will charge you to replace them - that is why I believe you would be better to gift any shares of stock via an account than certificate form.

I see clients too frequently that have lost their certs and can either NEVER recover them - total loss of all principle - or get hit with significant fees to replace them.
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Hawkwin: "I see clients too frequently that have lost their certs and can either NEVER recover them - total loss of all principle - or get hit with significant fees to replace them."

Can not ever recover them?

Or choose not to recover them?

I find it difficult to believe that significant amounts of principal are lost by any one person because of lost certificates.

Curiously, JAFO
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Can not ever recover them?

Or choose not to recover them?

I find it difficult to believe that significant amounts of principal are lost by any one person because of lost certificates.


Absolutely.

Two months ago:
87 yr old widow and daughter cannot locate all of her husband stock certs from the 80s They find two certs for 1000 shares each but the widow swears that there is a third. The third cert is never recovered and there is no record they can find of him ever owning it. Transfer agent was no help - total loss of principle on that cert.

Last month:
Son processing his dad's estate. Dad hid money every where - literally - in the walls, under the floor, in books, etc. They found 50k in savings bonds hidden in a book. Son swears there are more bonds as well as stock certs. No records exist and no info that we can use to contact a transfer agent.


-----

Now there may be some other way to get at those certs but I am not aware of such. Maybe if they can look at old bank records they can find dividend information that will at least show the stock owned.
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Now there may be some other way to get at those certs but I am not aware of such. Maybe if they can look at old bank records they can find dividend information that will at least show the stock owned.


I found some "hidden" money looking at tax returns. Getting the tax returns could help with things with dividends or interest as long as it's over $10.

rad
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Good idea.

I wonder though, if they simply get divs from the stock (if they get divs), will that be specific enough to track down the needed info.

Either way, it is a massive pain in the rump and it requires that the bene even know that there are stock out there to search for such.
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Hawkwin:

<<<<Can not ever recover them?

Or choose not to recover them?

I find it difficult to believe that significant amounts of principal are lost by any one person because of lost certificates.>>>>

"Absolutely.

Two months ago:
87 yr old widow and daughter cannot locate all of her husband stock certs from the 80s They find two certs for 1000 shares each but the widow swears that there is a third. The third cert is never recovered and there is no record they can find of him ever owning it. Transfer agent was no help - total loss of principle on that cert.

Last month:
Son processing his dad's estate. Dad hid money every where - literally - in the walls, under the floor, in books, etc. They found 50k in savings bonds hidden in a book. Son swears there are more bonds as well as stock certs. No records exist and no info that we can use to contact a transfer agent.


-----

Now there may be some other way to get at those certs but I am not aware of such. Maybe if they can look at old bank records they can find dividend information that will at least show the stock owned."


Thanks.

In each case the person is not even certain that a "missing" certificate exists.

I was thinking more of situation in which the owner (who was also probably thepurchaser) who had a summary list of Certifcates (including Cert. No. and No. of Shares) and simply could not locate one certificate.

Your scenarios involve much more missing information.

Regards, JAFO
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