How often to invest if you're charged a commission?

[cheapass]

I get ~$200 taken out of my paycheck every 2 weeks that funds my HSA account, and these dollars can be moved over to TD Ameritrade and used to buy stocks/mutual funds/ETF's. The problem is that every time I make a transaction, I'm charged a $6.95 commission.

How often should I invest these dollars to optimize between time in the market vs. paying the least in commissions? I was thinking I would let it build up and invest every 6 months or so but I'd be curious to know how I can determine what this optimal interval is.

Thanks

[Heroes821]

You might want to look into a different HSA company, you can rollover from HSA to HSA once per year.  All the investment options through mine are index funds (even a couple Vanguards) and I had no fees related to moving the money from the Cash fund to the investment fund ($1000 had to stay in Cash).

[Radagast]

Assume a 6% growth on investments and choose an interval so that lost compounding is equal to fees paid. According to my math the break even point is once every three months assuming you are putting in 3350 per year.
Edit: every 14 weeks for 3350/yr, every 10 weeks for 6750/yr.

[MrStash]

You might want to look into a different HSA company, you can rollover from HSA to HSA once per year.  All the investment options through mine are index funds (even a couple Vanguards) and I had no fees related to moving the money from the Cash fund to the investment fund ($1000 had to stay in Cash).

Huh, I have the exact same problem as the OP, didn't know you can roll it over to another HSA company per year. Too bad Vanguard doesn't offer HSAs. Which company do you use?

[cheapass]

Problem solved. Poking around TD Ameritrade's site I found they have a selection of 30 or so Commission-Free ETF's. Sorted them by gross expense ratio and I found two I like - VTI (ETF of VTSAX) and IVV (iShares Core S&P500 ETF). Expenses of .05 and .04.

Thanks for the insights y'all

[Heroes821]

You might want to look into a different HSA company, you can rollover from HSA to HSA once per year.  All the investment options through mine are index funds (even a couple Vanguards) and I had no fees related to moving the money from the Cash fund to the investment fund ($1000 had to stay in Cash).

Huh, I have the exact same problem as the OP, didn't know you can roll it over to another HSA company per year. Too bad Vanguard doesn't offer HSAs. Which company do you use?

Personally I've been using Discovery Benefits.  Under the individual HSA account they charge $3 per month. To invest your cash account needs to have at least $1000 remaining in it or they will sell investments to bring the cash balance to $1000. So $1036 should cover the account for the year plus paltry interest in the cash account.

As far as investments go, the options I have are:

HCB INTEREST BEARING ACCOUNT                           N/A                               **
JAMES BALANCED GOLDEN RAINBOW FUND (R)           GLRBX      0.97
T. ROWE PRICE CAPITAL APPRECIATION FUND (ADV)   PACLX   1.01
IVY ASSET STRATEGY FUND (A)                                   WASAX     0.99
JPMORGAN MKT. EXPANSION ENH. INDEX FUND (A)   OMEAX   0.98
TEMPLETON GLOBAL BOND FUND (A)                           TPINX   0.96
PIMCO TOTAL RETURN FUND (ADM)                           PTRAX   0.72
NUVEEN REAL ESTATE SECS. FUND (A)                   FREAX   1.3
VANGUARD 500 INDEX FUND (INV)                           VFINX   0.16
VANGUARD MID-CAP INDEX FUND (INV)                   VIMSX   0.2
VANGUARD SMALL-CAP INDEX FUND (INV)                   NAESX   0.2
VANGUARD TOTAL INTL. STOCK INDEX FUND (INV)   VGTSX   0.19
VANGUARD EMERGING MKT. STOCK INDEX FUND (INV) VEIEX   0.33
VANGUARD TOTAL WORLD STOCK INDEX FUND (INV)   VTWSX   0.25
VANGUARD INTERMED.-TERM BOND INDEX FUND (INV) VBIIX   0.16
VANGUARD TOTAL BOND MARKET INDEX FUND (INV)   VBMFX   0.16
AMERICAN FUNDS GROWTH FUND OF AMERICA (F1)   GFAFX   0.71
NEUBERGER BERMAN MID CAP GROWTH FUND (A)   NMGAX   1.12
VANGUARD SMALL-CAP GROWTH INDEX FUND (INV)   VISGX   0.2
NORTHERN SMALL CAP VALUE FUND                           NOSGX   1.24
AMERICAN FUNDS EUROPACIFIC GROWTH FUND (F1)   AEGFX   0.86
FIDELITY ADVISOR DIVERSIFIED INTL. FUND (A)           FDVAX   1.23


 Numbers are expense ratios, I just shoved it all in VFINX.

[RWD]

Problem solved. Poking around TD Ameritrade's site I found they have a selection of 30 or so Commission-Free ETF's. Sorted them by gross expense ratio and I found two I like - VTI (ETF of VTSAX) and IVV (iShares Core S&P500 ETF). Expenses of .05 and .04.

Thanks for the insights y'all

Warning! Before you buy those commission-free ETFs you need to enroll in TD Ameritrade's commission-free program or something (it's free to enroll).

I was in the exact same situation as you. I have an HSA with money transferred over to TD Ameritrade for investment. I saw the commission-free ETFs and went ahead and bought a bunch of shares of VTI. Noticed later that I had been charged a commission on their commission-free ETF. I enrolled in the commission-free program and sent a message to TD Ameritrade and they thankfully refunded the fees.

[cheapass]

Problem solved. Poking around TD Ameritrade's site I found they have a selection of 30 or so Commission-Free ETF's. Sorted them by gross expense ratio and I found two I like - VTI (ETF of VTSAX) and IVV (iShares Core S&P500 ETF). Expenses of .05 and .04.

Thanks for the insights y'all

Warning! Before you buy those commission-free ETFs you need to enroll in TD Ameritrade's commission-free program or something (it's free to enroll).

I was in the exact same situation as you. I have an HSA with money transferred over to TD Ameritrade for investment. I saw the commission-free ETFs and went ahead and bought a bunch of shares of VTI. Noticed later that I had been charged a commission on their commission-free ETF. I enrolled in the commission-free program and sent a message to TD Ameritrade and they thankfully refunded the fees.

Thanks for the heads up, I just enrolled. Weird they make you jump through hoops...