10 Free Automatic Trades

Sharebuilder is a little bit different from other brokerages in that they offer real-time trades, but they also offer a different pricing plan for their automatic trades. What’s the difference?

As the name implies, the Automatic Investment Plan (AIP) allows you to pick investments in advance. Sharebuilder will then transact your purchase(s) when you specify, or when funds are available. One key point here is that the AIP only processes transactions on Tuesdays. It’s ideal for people who don’t want to worry about real-time trades and just “average” their way into an investment.

Automatic Investments typically cost $4 per transaction, but Sharebuilder is currently running a promotion that offers 10 free automatic trades (a $40 value). Existing Sharebuilder customers are eligible, so click on this link once your account is open. You should see a page that looks like this:

On that page, click the Kick-start your account link and log into your Sharebuilder account. You should receive an immediate notification that your 10 free AIP trades have been enabled. I also received this confirmation via e-mail:

To take advantage of the 10 free trades, you should set up a plan before 31 January 2010. All 10 trades should be executed by the last Tuesday of the year 2010.

So, what made me break my mainstream-movie-going fast and venture forth to my nearest cinema? Zombieland? Heck no! I’m talking about a film so powerful that even the mere mention of the filmmaker’s name is enough to send some people into fits of erratic and aberrant spasms. And no, I’m still not talking about Zombieland!

I’m talking about Capitalism: A Love Story, by Michael Moore (cue the “Ack! Err! Blahr!”). It’s a comedy… and a tragedy. Above all, it’s a documentary about the failure of capitalism that we all witnessed in 2008. Because like it or not, that’s exactly what we saw. Many people have passionately argued that communism, though it may look appealing on paper, ultimately fails because it does not take into consideration human greed and corruption. I would point out that capitalism ultimately fails for the exact same reason.

When a free-market, sink-or-swim, only-the-strong survive system is brought to its knees by greed and corruption and has to turn to the federal government for a bailout funded by the taxpayers, that’s called a failure of the entire system. When many of the same banks who were rescued then turn around and slash credit lines, raise interest rates, and gorge themselves on newly added fees, that’s called a slap in the face.

Then again, this post is not meant to be a review of Moore’s new movie. Yes, I did enjoy the film, and yes, I’m glad that I chose to drive to the theatre and spend a whopping $9 per ticket to watch it. That was my choice, and I’m glad I did so. Capitalism: A Love Story is a movie that all of us should be able to enjoy, regardless of any political party affiliations.

Moore’s greatest problem, however, is that he is Michael Moore, and people will pooh-pooh him and his movies no matter the topic. I seem to recall lots of outrage and ire across the board over TARP and AIG last year, and yet many of these same people who railed against TARP, AIG, Citi, and the other too-big-to-fail crooks now rail against Michael Moore for… railing against TARP and those same Wall Street fat-cats! Strange.

That’s just the way it is, I suppose. Michael Moore makes a movie, and people get outraged over it without even bothering to watch it. Moore could make a movie in praise of Ronald Reagan and how tax cuts will be the saving grace of America, and those same detractors will ridicule and try to discredit it. Oh well.

Speaking of greed and corruption…

On a different note, before heading to the movie theatre, my wife and I swung by a nearby mall. I’m not a very good consumer – I haven’t been inside a mall since Fall 2004… seriously. Anyway, while heading into the mall, I saw something that really made me scratch my head. Take a look at this photo. Notice anything odd about it? Yes, this is in Texas.

Don’t see it? Look closer. See the handicap wheelchair tag hanging in the rearview mirror? Wow! While I concur that it’s entirely possible for a handicapped person to drive (or ride in) a Hummer… I don’t know… something just seems odd about it.

And here’s another thing – I mentioned that I had not been to a mainstream movie theatre since 2002. One thing I DID remember is that the price for the junk food at the concession stand is outrageous, even criminal. Nothing could prepare me, though, for exactly just how expensive it was. Here’s a cell phone snap:

Nearly four dollars for a small drink?! Almost five dollars for a small popcorn?! Pardon the sophomoric interjection, but LOLwut seems to satisfactorily express my confusion and incredulity. Oh, but it gets better….

This picture is a little harder to read, but c’mon, $7.50 for a personal pan pizza from Pizza Hut? Or, for the same price, you can get a few chicken tenders. What a deal! Want a regular hot dog (not a Coney)? That will be four dollars, please. How about an Icee? Oh, it’s $4.50. An ICEE! It’s just ice with some artificial flavoring! At least a pretzel is the same price. Holy $*@! That pretzel better tap dance and yodel for me before I suck it into my body and wash it down with a small bottle of water ($3.75).

If you can’t guess, neither my wife nor I bought anything. Since we were at the theatre a few minutes early, we watched with mixed amusement and horror as LOTS of other people did. Make that a large popcorn since I can get a free refill on it! It’s the best deal! Just slide your credit card. It will be alright.

Who knows when I will decide to go back to a mainstream movie theatre? Maybe another seven years? No matter how long I wait, I will be curious to see how much more inflated the prices will be for tickets and junk food. Maybe, just maybe, the skyrocketing prices will finally hit a breaking point, causing consumers to stop attending en masse, which will then result in massive profit losses for the movie industry. Will they scurry to the federal government and beg for a taxpayer bailout of their own? If they do, I will preemptively suggest that we consider calling it CRAP (the Cinematic Resource Alleviation Plan).

Take a coffee break and watch this. It’s worth it.

The Crisis of Credit Visualized from Jonathan Jarvis on Vimeo.

This time, not so much. Sure, I still have those nostalgic feelings on a personal level, but economically, I’m ready to kick 2008 to the curb. As painful as it is, here is how my meager portfolio fared for 2008. Suffice to say, it got pummeled.

All of my mutual funds are held at Vanguard. I like them for their simplicity, consistently low expense ratios, and selection of no-load index funds.

Retirement – Roth IRA

Here’s an overview of my Roth IRA. I started contributing to it in 2007, so there’s not a ton of money in it yet, and there’s even less after the brutal beating of 2008.

The yellow line is what I have contributed, while the blue line show its actual value. That huge dip in late 2008 is depressing, but perhaps the upward curl at the end is a foretaste of the feast to come? Maybe I’m just optimistic….

Here’s a comparison of year-end values:

At the end of 2007, my Roth IRA had just over $9,000 in it. Fast-forward one year, and my Roth IRA has… just over $9,000 in it. Had I not maxed out my contributions for the year, this would not be so depressing. As it currently stands, all my contributions for the year disappeared. That’s okay. This is long-term money, right? RIGHT?

Taxable Mutual Funds

In addition to my Roth IRA, I also have a meager selection of mutual funds in a taxable account at Vanguard. These funds are not quite as aggressive, but they have still taken a nice pummeling.

Once again, the yellow line represents my contributions, while the blue line represents the current value. Things were going pretty well until the bottom fell out in mid-2008. Phooey.

Here’s a comparison of year-end values:

Yet again, the value of my taxable portfolio ended slightly up, but when one considers the contributions that I made, depression sets in.

All together, my Roth IRA is about -41% into the red for the year, while my taxable funds are about -24% into negative territory. Ouch.

Care to share how much your portfolio has been bruised by the Great Portfolio Pummeling of 2008? Misery loves company, so I’d love to hear that I’m not alone.

Here’s to a better 2009!

I suppose the only good news here is that the Fed really has no more room to slash rates. All it can really do now is pump billions/trillions of dollars into the money supply.

The bad news is that we can expect banks to start slashing their savings rates accordingly. I’m updating the rate Wiki right now with some recent drops that I missed a few days ago, but I expect more to fall soon, perhaps starting with ING and WaMu/Chase.

Hold on to your pocketbooks, folks.

GET STARTED WITH A $50 BONUS!

Oh, tell me more!

I’ve stayed away from purchasing any individual stocks or ETFs… until now. This Sharebuilder offer finally convinced me to dive in. The offer code is INVEST50, and you can access it here:

http://www.sharebuilder.com/invest50

Opening an account is simple and can be done completely online. If you have an existing ING Direct account, you can link it to Sharebuilder after your account is open. Because ING now owns Sharebuilder, one nice benefit is that you can make immediate transfers between linked ING Direct and Sharebuilder accounts. Nice!

Pricing Programs and $4 Automatic Investments

Let’s keep this simple: Sharebuilder offers three different pricing programs. Two of them cost a monthly fee and one of them is free. Unless you want to trade frequently, I suggest sticking with the free option.

In the Basic (free) option, you can buy stocks for a $4 commission, but only as part of their Automatic Investment Plan (AIP). For someone who does not care about real-time pricing and just wants to “average” their way in, the AIP is neat. Essentially, you just:

1. Select the ticker for the stock or ETF that you want to buy and select a dollar amount that you want to invest.
2. Create an investment schedule – weekly, monthly, one-time only, or (my personal favorite) invest when funds are available.
3. Set a funding schedule – choose how much and how frequently to transfer from your linked checking/savings account.

Once your schedule is set, Sharebuilder handles the rest. All automatic investments are transacted on Tuesdays.

Money Market

All cash that you transfer into Sharebuilder is held in a money market account (BDMXX). As of this writing, the money market has a 7-day yield of 1.76%. While it is better than nothing, I’d rather see Sharebuilder offer something more along the lines of their own savings account (currently earning 2.75%) as a cash sweep.

Two Free Real-time Trades

Once your account is open, you can apply for another promotion. If it works, you will receive two FREE real-time trades. Normally, real-time trades are $9.95 each, so this is a good value. I’m not sure how long this promotion will last, but it’s worth a shot:

In your Account Overview, click the tab for Promotions. Enter the code RTTSITE.

If it works, you will receive a notice that you qualified for two free trades. Here’s the e-mail confirmation that I received:

I just used the two credits yesterday to buy my first individual stocks in my life! In case you’re curious, I decided to jump in and buy some shares of GE and INTC. Both stocks offer decent dividends, and I don’t plan to sell for at least 5-10 years. Maybe I won’t completely lose my assets.

All-in-all, I’m pretty happy with Sharebuilder. The interface is intuitive (to me), automatic investing works fluidly, and I appreciate the integration with ING Direct. If I were a more active trader, I’d probably look at something like Zecco. For my modest needs, Sharebuilder works fine.

The $50 bonus helps, too.

Where will it stop? Allow me to make a (hopefully erroneous) prediction – interest rates will hit 1.0% by Summer 2009.

See for yourself.

Alas, I regret to say that my prediction has come true, albeit about 8 months early! Today, the Federal Reserve slashed the Funds Rate all the way down to 1%. What does this mean? It means we can probably kiss our 3% savings accounts good-bye!

Just call me Nostradamus.

Since I am now such a widely revered prophet, I will graciously and generously bestow upon my readers five answers to your question about the future. Free of charge!

Behold! Nostradamus speaketh!

Q: How low will the Federal Funds Rate go?

A: By October  2009, the Funds Rate will actually hit Absolute Zero.

Q: How long will this recession last?

A: 42, naturally.

Q: Who will win the 2008 Presidential Election? McCain or Obama?

A: Neither. Ron Paul will win a landslide victory by write-in votes. His first executive order will be to tar-and-feather Bernanke and Paulson.

Q: So far this century we’ve seen both the dot-com and the housing bubbles burst. What bubble will inflate next? Gold? Oil? The Dollar?

A: No, no, no. Tulips.

Q: Do you have any winning lottery ticket numbers for me?

A: Uh, sure. But if you win, you have to cut me in at 3%, or whatever the current Fed Funds rate is, whichever is higher. On second thought, let’s just stick to 3%.

Here they are: 4-16-24-35-51-14. Wait a minute, maybe there should be a 42 in there somewhere….

Thus spake Nostradamus!

(Rates may be out-dated. Please see the Current APY Wiki for updates)

Can you believe it? This morning the Fed issued an emergency rate cut down to 1.5% (from 2%). While this is not unexpected – Wall Street has been crying and blubbering about a rate cut for a while now – the reaction of Dollar Savings Direct IS surprising.

Instead of dropping their savings rate, which is what tends to happen following the Fed cut, they RAISED their rate from 3.75 to 4% APY. Here are a few highlights of the account:

• Current rate: 4% APY
• Minimum required: $1,000
• Can link up to 2 external accounts

Dollar Savings Direct is a newly-spawned online savings account from Emigrant Bank. I’m still perplexed as to why Emigrant didn’t just raise the rate on their existing Emigrant Direct site instead of creating a brand new division. Oh wait, I forgot about that whole GREED element. You know, that same greed element that’s currently causing our economy to crater?

I’m on the fence as to whether or not I will take the time to open this account. I admit that I sprung for the Washington Mutual 4% offer a few weeks ago, and we saw what happened there. I was only able to enjoy a brief period of high rates before the bank changed names and dropped the savings rate to 3%.

Still, any rate increases are good right now, and I applaud Dollar Savings Direct for raising their rate despite the Fed’s move to punish those of us who keep a chunk of change in savings accounts. I only hope they manage to keep the rate that high for more than a few days/weeks.

I am sorry to hear that you have not been feeling well lately. However, I have some news that might cheer you up! Last night, my wife and I did something that we haven’t done in a long time. No, not that, you pervert. Ahem… we drove our car. Furthermore, we bought gas.

I only mention this because it’s such a rare thing for us to do. You see, my wife and I live in a glorious little town with excellent public transportation. We also make great use of our glorious little bicycles. As a result, we only buy gas every few months. Before last night, the last time we bought gas was in early June.

We only drove our car because we went out to eat at a glorious little restaurant. You’d like it. It’s a local place, middle-eastern cuisine. It’s popular in our town for its uniqueness, attractive prices, and delicious food. The Greek/Turkish coffee is amazing!

We chose to eat there for two reasons: 1) We like supporting local places instead of big chains, and 2) we have a discount diner’s card that gave us a free meal with the purchase of another meal. We had two regular meals and coffee for a grand total of $13.

I realize that in order to make you feel the tiniest fraction better, I should have paid full price instead of using the discount card. Sorry about that. However, if it’s any consolation to you, I DID pay with a credit card!

Except… the credit card that I use gives me 5% back at restaurants. Except… I pay my bill in full every month. Again, I realize that I should give you a little boost by paying minimum balances, but I just can’t seem to help myself. Apologies.

Come to think of it, I doubt any of the dozens of sign-up offers I’ve taken advantage of in the last couple of years helped you at all, have they? Sure, those extra thousands of dollars in side income came in handy, but I bet they helped ME a lot more than they helped you.

I guess what I’m trying to say is that I somehow feel the tiniest-bit responsible for your current malady. Instead of being foolish with my money, I save. Instead of making impulse purchases, I resist. Instead of driving a gas guzzler, I bike. Instead of going out to eat every day, we cook at home. Heck, I’m even earning interest on my “economic stimulus” check! Have I made my point?

For all of these responsible acts, I apologize. I should have had your best interests at heart instead of my own. Only then, I might ask, would you be willing to give me a personal bailout?

Get well soon! I assure you that I’m doing my best to get you back on track, even if my best is only one tank of gas a quarter.

Wishing you a speedy recovery,

Mr. B

Just stick money in the fund(s) and FORGET ABOUT IT. Resist the urge to log in and check it every day. You’ll only give yourself ulcers!

I think it’s terrific… fantastic… nay, stupendous advice! There is just one problem:

I have not been following that sage advice lately!

I’ve owned mutual funds (at Vanguard) for a couple years now, and most of the time I only pay attention to them when I want to buy more shares.

A Bad Habit

I must confess – when the bottom started falling out of the stock market back in January ’08, I began a regretful habit of logging into my Vanguard account every evening to survey the damage. I did it first out of wonderment, then amazement, then fear, and finally disgust. Now it has become a habit!

Most of my Vanguard assets are in index funds, most of which have taken a severe beating since the beginning of the year. However, I am proud that I have not sold a single share, despite the volatility. The current value of my shares have decreased, but I still own the same number. In essence, I have not lost anything.

I’ve actually used this opportunity to scoop up a few more shares, as if they are “on sale.”

Still, it’s awfully depressing to watch a value that drops almost every day, even if the loss is unrealized. Yes, I realize how silly and foolish it is to check on my mutual funds frequently. No good can come from it. It’s a waste of time and energy.

That’s what I keep telling myself, yet I continue to log in and gawk every evening! It’s as if I’m witessing a train wreck in-progress and can’t look away.

My Pledge

At this point, I fully intend to follow that sage advice my wise friend gave me. Therefore, I refuse to log into my Vanguard account for at least a month. Let’s make it April 15th.

I don’t need the money in my index funds anytime soon, and I can’t afford to buy anymore shares for a little while, so I have absolutely no need to sneak a peek at my account. No reason at all. Not going to do it.

I intend to kick this ridiculous daily-checking habit of mine and reset it more along the lines of monthly-checking.

How about you? Have you found yourself sitting on the edge of your seat and biting your nails as you watch your long-term investments plummet? If so, you are welcome to join me in NOT logging in again for at least a month!