While searching for cheap access to Dimensional Fund Advisors (DFA) funds, I ran across the fact that you can get access to them via West Virginia’s SMART529 Select Plan. If you are a WV resident, the contributions are even tax-deductible!

They have various aggressively allocated portfolios with an expense ratio of about 0.20-0.50%. The killer is that there is also a management fee of 0.55%, which can up the overall annual expenses to over 1%. Depending on how much you think DFA will outperform similar Vanguard funds, you may want to go with a Vanguard-based 529 like Nevada’s. Check out their Aggressive Growth/Age-Based 0-3 Portfolio (total expenses of 1.02%):
[Read more…]

As part of my free trial of Contributor’s Corner, last week I bought 499 shares of Advanced Nutraceuticals (ANII.OB). ANII makes vitamins and supplements, and recently filed for a 500-to-1 reverse stock split. It’s doing this order to get under 300 shareholders and thus avoid all the paperwork involved with Sarbanes-Oxley compliance. Now, this could be a good or bad thing in people’s eyes, but I’m not focusing on that.

What I am focusing on is that in order to get rid of all the small shareholders, they are going to pay $4 for each share if you have 499 shares or less. ANII.OB is currently trading at ~$3.45. That’s about a 16% gain, and from George and other sources it seems like it is likely to go through. Here are some more articles:
[Read more…]

I got a call today from Scottrade that they want me to stop referring customers to them via this blog, as part of their Scottrade referral program. I didn’t have time to ask them exactly why since I was busy, but after hanging up I got to thinking – how is this a good idea for them? Not like I was spamming anybody. Isn’t that the whole point of having a referral program? To get more customers? Shrug.

…discussion at Vanguard Diehards forum, started by a newbie investor after today’s big stock market jump. Does it sound familiar?

I am 27 years old and just recently decided to buy into the market in a lump sum in a taxable account … on May 10, 2006, I jumped right in with about 35K. I couldn’t have picked a worse time to buy in. Two months later I’m down $2,600 with no recovery in sight, and little confidence of any near term turnaround. So last Friday, I moved everything to a money market account, and missed today’s bounce. Now I’m convinced that I will always make the wrong investment decisions, and can’t get the thought of knowing that I threw that money away out of my mind. What do I do now? Should I DCA money back in? Should I buy back in right now? Should I wait a few months and see how the market is performing? Should I cut my losses and abandon the market forever outside of my retirement accounts?

[Read more…]

I tend to swing constantly between being really interested in trading individual stocks and then not looking at a quote for weeks. To make things worse, I live in the Pacific time zone and the markets close at 1pm here. I am not a morning person, which leaves me with about two hours to trade each day! :/

I’ve always liked the idea of keeping the majority of my retirement savings in index funds, but having a separate money account to try and “beat the market”, as everyone says. Maybe either give it $50 a month, or cap it at 5% of my net worth? I’ve read several investing books that mention this as a way to manage the urge to actively trade, but does anyone out there actually have one of these accounts? If so, do you recommend it?

If you’re a Warren Buffett fan, you’ll enjoy this 3-part series by the Charlie Rose show on PBS, free for now via Google Video:

July 10, Monday – Warren Buffett: The Man
July 11, Tuesday – Warren Buffett: The Business
July 12, Wednesday – Warren Buffett: The Gift (not up yet)

From the brief bit I’ve seen, Buffett seems very energetic and interesting to listen to. I’ll definitely watch this later. Thanks to AK for the tip.

There is a new discount brokerage on the block – SogoInvest.com. Mentioned yesterday in the Wall Street Journal, this broker is interesting on a couple of levels.

Automatic Investing Broker King?
It’s obvious that this broker has buy-and-hold automatic brokers like ShareBuilder as one of its targets. It offers the same no minimums and easy dollar-cost-averaging via fractional shares and automatic weekly investing. But it’s cheaper. At the most basic plan, it offers $3 automatic trades vs. $4 at ShareBuilder. And whereas ShareBuilder charges $14.95 for real-time market trades, SogoInvest charges the same low $3. Nice.

If you want a lot of auto trades, you can get 15 free for $15/month, plus only $1 more for each additional one. Real-time trades are then only $1.50. However, if you truly want to “build your own mutual fund” with more than 20 stocks, FolioFN still offers 200 automatic trades per month, for $20/month or $200 a year.

Overall Discount Broker King?
Looked at another way, SogoInvest is just another really cheap discount broker. $3 a for market/limit orders is pretty solid. As an introductory offer, new signups at Sogo get $1 trades (both real-time and automatic) for 90 days. Note that IRAs are currently not available. A good question would be what kind of features they offer and how they compare with other brokers with trades in the $5-$7 range.

Still, I wouldn’t say they are the hands-down cheapest. MB Trading which still offers trades starting at only $1 (100 shares or less). Depending on your trading behavior, MB Trading or the similar Interactive Brokers might be cheaper.

Grant at TheCornerOfficeBlog has his own opinions on SogoInvest as well, and makes some good points.

I think that Sogo offers a good alternative to ShareBuilder (although SB has given me a decent amount of free money). But as a discount broker I’d weigh all the options first. Price is big, but not everything.

For me personally, I’m going to stick with Scottrade for my main account, and continue to tinker with my MB Trading account whenever I have enough time to do so. Of course, if they offer a juicy sign-up bonus…