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John Lounsbury

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  • Must-Know Criteria for Picking Inflation Proof, High Dividend Stocks [View article]
    notsosmart - - -

    Don't avoid trading to save money. If you lose 10% by avoiding a 1% commission, that would be a poor choice.

    You should (if you already haven't) use an online discount broker. You can do 10-15 trades for the cost of one trade with a traditional broker.

    I agree DRIP plans are a great way to slowly build small positions. Personally, I have always gotten out of a DRIP before it reached 5% of my total portfolio so I could manage the stock more actively.

    In one case I repeatedly moved shares out of a DRIP over the years whenever necessary to get from 5% back down to the 2-3% of portfolio range. Yes, in that case I could have done almost as well letting the portfolio build over most of that time (1975 to date), but I did avoid some of a 65% drop 1992-3 and a nearly 50% drop 2000-2002. And I did not know in the 1970's that the stock would do as well as it has for the next 30+ years.

    Other DRIPs I have had for a long time started small and have never gotten close to 5% each.

    You wrote: "every broker has to worry about his own pocket book before yours.think for yourself. "

    As a former series 6, 7, 63 licensed broker, I can tell you that many brokers are too lax on this potential conflict of interest issue. I left the brokerage business seven years ago and went to the fee only advice model. My clients are very happy, they get more timely buy, sell, hedge advice and actually spend less money, while my income has actually risen. The cost of my advice plus the discount brokerage transaction costs has been cost effective for my clients and income is greater for me than my former share of brokerage commissions.
    Apr 11 01:05 PM | 9 Likes Like |Link to Comment
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