08-17-2013, 09:02 AM
(08-16-2013, 11:54 PM)scott Wrote: I'm excited I found this forum, Kerim. Thanks to Dan Mac for mentioning it on his blog.
Welcome Scott! Very glad you found the forum and thanks for signing up and joining in. Thanks also to Dan Mac for the mention -- I truly appreciate it. At this early stage in a site's life, every link and new member means a great deal.
(08-16-2013, 11:54 PM)scott Wrote: I originally owned KO back in 1996 but had to, unfortunately, sell it all to help pay for school. I knew nothing of dividend growth investing then either. Really wish I would have held onto it!
School is in itself an important investment, but I know what you mean. It is important not to dwell on the past, but I wouldn't be able to help thinking (now and again) what those shares would be worth right now, especially if the dividends had been reinvested.
(08-16-2013, 11:54 PM)scott Wrote: I've always tried to purchase, at a minimum, $2000 into a stock. My trades are fairly cheap at Schwab ($8.95), but I'm worried that too frequent trading will eat into profits. My concern is that I don't have the capital to purchase $2000 currently, but if I wait until I do I might miss on this minor dip. If the ex-dividend date were sooner I might make an exception to the >$2000 at a time rule. Is this a concern that you guys have or in the long run won't really matter.
This is definitely something I keep an eye on, but I don't let it overshadow making the buys I want. It is of course important to keep transaction costs as low as possible. But as long as reinvestment is free, if you are following a buy and hold approach to your dividend stocks, I doubt you are trading so frequently that the transaction costs are harming your results. Like you, I prefer to buy in $2000 to $3000 chunks. At $7 per trade (Vanguard), that works out to one-third of one percent or less, which I think is great. However, sometimes I will buy $1000 of a stock, like my recent KO purchase. Given its price right now, I wanted some shares, but not yet a full position. In such a case I don't fret over paying seven-tenths of one percent in transaction costs. If I chose the stock well, it really shouldn't matter in the long haul, as you state.