Author Topic: Thoughts on portfolio building  (Read 8978 times)

closer

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Thoughts on portfolio building
« on: April 19, 2016, 10:04:44 PM »
Given $1500 every two weeks to start building a dividend portfolio. What would the best approach be?

Buy something every two weeks for 1500 or wait and buy when you have 3000.....

Driko

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Re: Thoughts on portfolio building
« Reply #1 on: April 19, 2016, 10:38:23 PM »
Give us some more information

Is this in a brokerage taxable account?

Roth IRA?

401k?

Do you want etfs or individual stocks.

Personally, I also like dividends, but I focus on them after my roth and 401k are maxed out with index investing.

to answer your question to the best of my ability. If you are buying individual stocks you may have brokerage charges which could be quite expensive if you are only buying in blocks of 1500 dollars. Even 7 to 10 dollars on a 1500 dollar purchase could eat into your returns. Other options are dividend based etfs and mutual funds.

Seppia

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Re: Thoughts on portfolio building
« Reply #2 on: April 20, 2016, 02:09:37 AM »
Given $1500 every two weeks to start building a dividend portfolio. What would the best approach be?

Buy something every two weeks for 1500 or wait and buy when you have 3000.....

It depends on your transaction fees.
If they are zero, just invest whenever you have the money.
Same if it is a %
If it's a fixed sum then you might prefer minimizing it and investing in larger chunks.

Also remember that there is nothing "magical" about dividends.
If company X distributes cash to shareholders, its real value diminishes by X the moment they do so.

I personally value dividends (my largest single stock holding is Royal Dutch, that I own since 2006), but I am aware that there's nothing special about them, aside from the fact that usually companies that pay good dividends are big, stable, mature companies that generate a lot of cash (which are usually the type of companies I like to buy, all the rest is index)

forummm

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Re: Thoughts on portfolio building
« Reply #3 on: April 20, 2016, 10:06:28 AM »
Just index and put the $1500 in each time you have it. Auto purchase every 2 weeks. Never worry about it.

closer

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Re: Thoughts on portfolio building
« Reply #4 on: April 21, 2016, 12:28:36 AM »
Thanks for the input folks. Always fun to hear what experienced might do

Seppia

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Re: Thoughts on portfolio building
« Reply #5 on: April 21, 2016, 01:25:43 AM »
Just index and put the $1500 in each time you have it. Auto purchase every 2 weeks. Never worry about it.

I would say the only asterisk here is if he/she has transaction fees, as I mentioned above.
In some places (i.e. Europe where I live) the only way to get Vanguard is by buying ETFs via a brokerage account, and the one shot fees can be significant if the amount invested is low.
Some banks here charge 19 euros fixed per transaction.
In that case, one would be much better off investing 4500 euros in chunks instead of throwing in 1500 every two weeks.

steveo

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Re: Thoughts on portfolio building
« Reply #6 on: April 21, 2016, 03:12:37 PM »
Just index and put the $1500 in each time you have it. Auto purchase every 2 weeks. Never worry about it.

I would say the only asterisk here is if he/she has transaction fees, as I mentioned above.
In some places (i.e. Europe where I live) the only way to get Vanguard is by buying ETFs via a brokerage account, and the one shot fees can be significant if the amount invested is low.
Some banks here charge 19 euros fixed per transaction.
In that case, one would be much better off investing 4500 euros in chunks instead of throwing in 1500 every two weeks.

This is the same as per my situation. I wait until I have 10 grand to invest. If you are just investing in an index mutual fund for instance with no transaction fees then I would invest every time I had the money.