How to Begin Investing with Sharebuilder-Part 2

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By Miragi
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In Part 1 of How to Begin Investing with Sharebuilder, we discussed how to open a new account. In Part 2, we'll explore how to go about choosing and setting up the right investment plan for your needs. With some time, careful research and thought, you'll be able to create an investment program that will put your hard earned money to work without a lot of hassle.

Difficulty: Moderately Easy

Instructions

Step 1

Take a look at the Account Features. You can choose from Basic, Standard and Advantage accounts. If you want to start out by purchasing stock in just one company, you may want to consider sticking with Basic, as your fee will only be $4 each time you invest. With Standard and Advantage accounts, you are allotted a certain amount of trades, and then pay a smaller fee for any additional trades. With Standard and Advantage accounts, you get access to more specialized research tools, and discounts on margin trading.
Step 2

Review the Pricing. Again, the Basic account, offers $4 per trade. So, if you were to buy stock once a week, it would cost you $4 per week ($16 per month) to buy as much of one stock that you want. If you should decide that you want to invest in several stocks, however, you will be better off by choosing the Standard or Advantage accounts, where you can get 6 or 20 free trades per month, and pay $2 per additional trade on Standard, or $1 per additional trade on Advantage. Real-time trades (those that you want to carry out immediately) and options trading cost $9.95 per trade. Making trades by phone is a bit more costly at $19.95 per trade. The Standard account costs $12 per month, while the Advantage account costs $20.
Step 3

Set up your account funding sources. Click on the Account Profile tab, and under Account Preferences (last section), click on Add Checking/Savings Account. Here you will enter the account type, routing number and account numbers for the bank account that you will use to fund your Sharebuilder transactions. You also have the option of funding through wire transfers or via check through mail.
Step 4

Click on the Trade tab, when you are ready to choose the stocks you wish to purchase. To set up your automatic investment plan, click on the Automatic Investment link. On the next page, click on Manage Plan. You can choose your own plan or get help with Sharebuilder's Portfoliobuilder investment planning tool.
Step 5

Choose the day and frequency with which you want to invest (weekly, monthly, twice monthly). For the Standard and Advantage plans, the fee is monthly. For the Basic plan, the $4 fee is deducted from the amount you invest (per stock). For example, say you invest $20 per week in shares of Sirius XM Radio (SIRI). The transaction will reflect $16 in purchased shares at that day's trading price and a $4 trade fee. If you invest in multiple companies, the $4 fees can add up quickly, so make sure you're opting for the plan that will best suit your investment needs.
Step 6

Make sure that funds are available from your bank-for EFT transfer-or that you send money via transfer or by mail before your scheduled investment dates.

Comments

Alrady said

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on 11/24/2009 Good info... so basically this is a way to buy PARTIAL share????? I like this idea and you are so right about checking out through Motley or Morningstar.