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akivojuqerupe
08-10-2015,
Hello all! I am new to this fourm, and I would love to become a community member. I am currently 18 years old and in college.

I recently did weeks of research to find the best stocks for my dividend strategy. I put in a fair amount of money, and I bought about 1 share of 27 companies. I had some money left over so I bought 4 shares of a high dividend oil company. I just had a quick question about balancing my portfolio.

My main goal is to build up my portfolio for dividend income to reinvest, so it would be like compound interest, and I was thinking about putting in ~$200 a month. To reduce commission fees, I was going to buy one stock a month but in blocks of about $200. Would the best way to diversify this be to buy 1 stock a month out of my 27 companies? Should I stick with 1 share of each or should I buy more of the smaller cost companies so I diversify my money and not stocks.

All suggestions are welcome
Thanks,
Kyle

ajzohrnd77
08-12-2015,
One stock a month at let's say $10 commission to get in - you are going to invest $2400 a year and pay $120 in commissions so that is already 5% gone - how long is your time horizon? Are you in for the long haul? How about waiting until you can buy about $1k of stock at a time?

ajalgsbt24
08-12-2015,
Thierry Martin said: ↑
One stock a month at let's say $10 commission to get in - you are going to invest $2400 a year and pay $120 in commissions so that is already 5% gone - how long is your time horizon? Are you in for the long haul? How about waiting until you can buy about $1k of stock at a time?
With the website I am using, it is $4.95 per commission. I want to invest at least $2400 a year and pay $59.40 in commissions, so that is about 2.5% which I can deal with. My time horizon is as long as I can to get this portfolio running so I can let compound interest work its magic, which is preferably 3 and a half years so I dont have to put in anymore when I am paying off my loans. I am willing to go for the long haul. The reason I do not want to wait to buy $1k of stock at a time is because I already bought 1 share of 27 different stocks, and if for 5 months I put $1k toward one stock, then my diversification is really off. I would have ~50% of one stock and ~50% of 26 stocks until i get my hands on more money. I am just unsure how to distribute my money to re-balance/upgrade my portfolio.

akehuhar
08-13-2015,
If you only want to pay 59.40 in commissions, then that means you are only going to be able to place 12 trades for the year.

That commission limit basically just set how you are going to do it. Every month you are going to put $200 in 1 security, then the next month another and so on.

At the end of year one will leave you with securities 1-12 $200+/- more invested then the rest 13-27. Then next year you could take the monies and increase securities 13-25

If this is the way you want to go then I would suggest increasing the higher yield ones the first year. The second year the next. This will be the only way I can see doing this without your commission rates going sky high.

The better approach may of been to invest in just 12 companies, then way at the end of the year each one has the same amount in expended capital.

Akimtiuvd
08-13-2015,
aahepp said: ↑
If you only want to pay 59.40 in commissions, then that means you are only going to be able to place 12 trades for the year.

That commission limit basically just set how you are going to do it. Every month you are going to put $200 in 1 security, then the next month another and so on.

At the end of year one will leave you with securities 1-12 $200+/- more invested then the rest 13-27. Then next year you could take the monies and increase securities 13-25

If this is the way you want to go then I would suggest increasing the higher yield ones the first year. The second year the next. This will be the only way I can see doing this without your commission rates going sky high.

The better approach may of been to invest in just 12 companies, then way at the end of the year each one has the same amount in expended capital.
Click to expand...
This seems to be the strategy I was going to use, and it makes a lot of sense. I did not want only 12 companies because it is less diversified.

Thank you for the input,
Kyle