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| Investment Strategy For Dollar Cost Averaging Posted: 19 Feb 2011 09:00 AM PST The individuals who cannot afford to invest more finances at some point of time, then dollar-cost averaging will be an efficient method of investment for them. For instance, if a person can make investment of a very small amount, i.e. from US$20 to US$40 every month and he/she can still be befitted with a large variety of investment products, such as exchange traded funds and stocks.
Difficult in Past to Make Investment
During the times of yore, it was not easy for large number of individuals to make an investment of cash in the stock market owing to the condition of least amount of brokerage which was pretty high. Share builder The situation was altered with the inception of Share builder (an online stock brokerage company) in 1996. Nowadays, this company is Supplementary of ING Bank, as ING Group bought this company in November 1997. After that, the shares have become available to all Americans in Wall Street.
Share builder and Dollar-Cost Averaging
Why do people offer Share builder despite the availability of other online brokerages firms in abundance? Some of these even charge fewer commissions on the instantaneous deals. Actually Share builder provide certain services that are offered by none:
Ø No lowest account balance is required Ø The bonus reinvestment for each and every security is without any extra or holding cost. Ø The investors have opportunity to buy partial shares of a security with Share builder. Ø It offers three diverse investment schemes. Even in one of these, share of stocks or exchange traded funds can be purchase for a trivial amount of commission of US$1.
Automatic Investment Schemes of Share builder
All types of investments, i.e. Basic, Standard and Advantage can be made with the involuntary investment schemes on a preferred Tuesday every month. To make each and every investment for every involuntary plan's registered people is how these exceptionally low rates are available. The instantaneous deals can also be availed at an expense o US$9.95. Though it is higher the amount of commission charges for automatic investments, but in contrast to other available online brokerages, these charges are pretty reasonable. None of the other trader working online gives you the facility of free bonus reinvestment. The bonus or the profit amount on your investment is transferred into you money account. When the profit is reinvested the extra commission will be deducted. With the help of Share builder accounts partial shares of a security can be bought as well. For instance, if an investor plans to make an investment of the amount of US$100 on monthly basis and his involuntary investment plan suggest buying the shares of ABC Company. If on the chosen date of investment, the share price of ABC Company is US$42/share, then in this month investment will buy 2.3809 shares of ABC. This skill of indicating a particular amount of cash every month is one of the major benefits of this investment plan which is ideal for dollar-cost averaging. The bonus reinvestment’s can also purchase the partial shares. Share builder requires very trivial amount as minimum brokerage amount, hence the entire American nation have an access to Wall Street, no matter how much they can invest for stocks. Even the individual retirement accounts can also be used for this purpose. The stratagem of dollar-cost averaging investment has made it possible for all to make an investment in stocks. If one makes a consistent investment continuously, he would be able to make better investment at end of the day.
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