10-14-2014, 05:56 AM
(10-13-2014, 01:58 PM)Lewys120 Wrote: My main problem is finding enough capital to invest and get a decent holding (I pay $18 share comission)
In my opinion this is very bad.
Considering $1000 per order and dividend yield ~3% per year this means you are paying for the first 6 months of dividend in advance.
My suggestion is to look for another broker.
What I think you should look for in a broker is the following:
1. Reduced commissions - $6 is the max I would go here, you can get lower than $1 in some brokers.
2. How high is the "Maintenance fee" or "Inactivity fee" - I prefer no fee at all but up to $10 is acceptable if it is an improvement over what you are paying now.
3. Make sure the broker does NOT charge dividend fees (A friend of mine had a brokerage account where he got $1.35 in dividend and was charged $4 in commission for it.. he PAID for the dividend more than twice the dividends worth! you probably guessed that he switch brokers).
4. The ability to communicate with someone if you have any issues (you shouldn't have any but just in case).
5. A thing to note is if you are getting charged for corporate actions like splits.
What I would ignore if I were you:
1. "Fast executions" - this apply for day-traders that want to execute orders in real time.
As a buy-and-never-sell you pick your entry using limit orders (you shouldn't chase stocks in real time) and let it either hit your price or let it go moving to the next stock on the list.
2. "Direct access" - this allows trades you to send orders to specific exchange instead to their brokerage.
As a dividend investor you don't care which exchange fills your order and takes $0.00121 per share from the exchange they used instead of giving it to you.
The only thing you care about is that your order will be filled at the price you chose.
3. "Advice/Research" as a Dividend growth investor you have different approach to the market than the brokerage analysts and advisers.
They are focusing mostly on "growth" and you should focus on "viable dividend growth".
They will usually tell you to buy or sell something just to get you to do more transactions and that is the opposite of what you need.
Basically I recommend that you calculate how many transactions you are planning to do in the next 12 months, add to that the "monthly fee" for 12 months and get a number which represents how much you'll pay your broker during the next 12 months.
Do the same for the other candidates you have and sort them in a table.
Once you get that sorted out you can compare them and decide if you want to pay more for something the more expensive brokerage firms are offering.