Purchase Size: What Do You Do?

[Be Here Now]

(04-05-2014, 11:26 AM)hendi_alex Wrote: I don't understand this preoccupation with cash 'burning a hole in the pocket'. I prefer to let the fresh cash both from dividends and from new savings accumulate until the market presents some obvious bargain.

I'm with you Alex.

I DRiP some of my positions and accumulate dividend cash from the others. I keep a list of stocks I want to buy, I have a minimum yield price point I am willing to pay for each, and I regularly monitor their charts to see when market psychology is presenting me with buying opportunities. When all of the above are aligned, and if I have the cash (of course!), I will buy.

I am not concerned with purchase size because I get 100 free trades per year in each of my accounts. Automatic reinvestment does not count as a trade. My broker no longer offers this option or I would recommend it.

The SA author who writes the 'MyMadMethod' series (forgot his name) trades in very small lots. He uses Interactive Brokers to keep his costs down. I looked into them and they certainly were cheap, much better than any of the others.