08-17-2013, 01:17 PM
(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.
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! Anyway, I'm now starting to invest in dividend growth stocks and Coca Coca is definitely one that I will be buying soon with a holding period of forever.
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.
I can understand your feelings on wanting to wait until $2000 to keep your transaction costs down, but at $9 per trade, you would be paying just 0.9% on a $1000 purchase. At a nearly 2.9% yield on KO, you would make up nearly all of that transaction cost with your first quarterly dividend, not to mention if you think the stock is an attractive price right now the daily fluctuations are often more than 1%.
I agree that frequent trading can add up quickly on transaction costs, but as long as your aren't selling in and out of positions and doubling your costs, I think $9 on a $1000 transaction is pretty reasonable.