January 2, 2011
ShareBuilder Review 2014
ShareBuilder is an online brokerage, offering discount stock trades via automatic investments for only $6.95. This online discount broker makes it simple and afforable to start investing.
Even if you don’t have much available to invest each month ShareBuilder helps your investment go farther. It’s dividend reinvestment and fractional share purchase abilities help compound your investments and the cheap stock trades help keep your costs low.
To help get you started there are frequent ShareBuilder promotions where they offer an investment account bonus when you open a new account.
ShareBuilder & Capital One 360
Years ago I opened an high yield savings account with Capital One 360 and ever since I’ve always admired the company for its innovative approach to making saving simple with the online bank account.
When Capital One added the self-directed online brokerage service of ShareBuilder it upheld its reputation for innovation and continuing its tradition of putting money management tools into the hands of the little folk, like me. The ability to link your ShareBuilder account with your bank account is an added bonus.
ShareBuilder Investing Services
Undoubtedly what makes ShareBuilder stand out from every other online brokerage is automatic investing. Based on dollar-cost averaging and heralding back to ShareBuilder’s start as an offshoot of a DRIP (dividend reinvestment program) company, with automatic investing you schedule weekly, bi-weekly, or monthly automatic deposits of a specific dollar amount you set from your bank account into your ShareBuilder account to apply toward building your existing portfolio of stocks.
With automatic investing, you don’t have to wait until you have enough money to buy full shares of stock, you can buy partial shares with whatever you can afford. By slowly building up your portfolio this way, you benefit from dollar-cost averaging.
The idea is that regular, recurring investments help you avoid making buying/selling decisions based on emotion. You may miss the lowest price to buy in but you’ll also avoid sinking all your money in at the highest price as well.
Of course, if you’d rather buy full shares in real-time trading, you can do that at ShareBuilder too, executing market orders on the spot and taking advantage of any immediate buying opportunities. Although primarily a self-directed online broker, ShareBuilder does provide phone trading too, if you’re just not yet comfortable doing it online.
ShareBuilder Investment Products
At ShareBuilder you can invest in mutual funds, individual stocks, and exchange traded funds (ETFs). ShareBuilder gives members access to over 170 no-load mutual funds. You can also open or roll over an IRA – Roth or Traditional – and roll over your 401(k) into a retirement planning account. Certain accountholders can also engage in options trading, including advanced options services like Early Exercise, Automatic Exercise, and Assignment.
ShareBuilder Fees & Commissions
When you set up your ShareBuilder account you are given the option of making individual trades or setting up an Automatic Investment Plan.
You can buy and sell stocks, mutual funds, and ETFs and pay per trade. The current rate per trade is $6.95.
Using automatic investments you can also invest money into ETFs, mutual funds, and stocks but you set it up to buy shares on a regular schedule. The pricing for this approach is different, you’re only looking at $3.95 for each investment.
Here’s a chart of ShareBuilder Fees:
|Automatic Investments |
(Stocks, Mutual Funds, and ETFs)
|$3.95 per investment
|Real-time Trades||$6.95 per online trade|
|Options Trading||$6.95 + $0.75 per contract|
|Mutual Funds - |
No Transaction Fee Program
|$0 - online only (fee if you don't hold fund for at least 90 days)|
|Mutual Funds||$19.95 per online trade|
|Phone Trades||$19.95 Real-time and Mutual Funds trades|
No matter which pricing program you’re enrolled in, investing in any of 500 different no-load mutual funds costs $19.95 per trade online. But with ShareBuilder’s No Transaction Fee (NTF) program, you can invest in any of 400 different funds, including ING Mutual Funds, for no fee at all.
Options & Phone Trades
Options contracts run $6.95 plus seventy five center per contract but personally, borrowing against my portfolio for any investment makes me a little nervous. Still, I’m glad its available so cheaply for those who need it or feel more comfortable than I do with it.
Phone trading, another service of which I wouldn’t avail a self-directed online broker, costs $19.95 per transaction for all members. Express Funding, an impulse-based move I also try to avoid, costs the real-time commission plus $6.95 per trade.
ShareBuilder Research Tools
Investor education is a key focal point of ShareBuilder’s ever-evolving services and one of the highlights of membership. Beyond its set of deft search tools – including the Stock Finder, Mutual Fund Finder, and ETF Finder – ShareBuilder also has a Fund Compare tool, which does just what it sounds like. It lets you track market moves with Market Mover and identify the highest rated stocks with the Stock Grade Finder. And, of course, you get a Watch List to keep track of possible investments you’re considering.
Some of the research tools I’m most fond of, however, are the ones that don’t just help you locate good investments but manage your entire portfolio and advance your understanding of what makes an investment good (or bad).
For example, there’s the Portfolio Builder that first analyzes your personal investing style and risk tolerance, then helps design a personalized portfolio to match it that you can then, if you choose, integrate into your Automatic Investment plan.
I also love the What If You Had Invested tool that lets you see how you would have done if you had made a different investing choice at some point in time. No other investment tool I’ve found online lets you learn from your mistakes without first having to suffer making the mistakes. It also allows you to see if you’ve smartened up enough in your understanding of investing to start making those riskier choices you didn’t trust yourself until now to make.
As well, I appreciate the Retire My Way program for planning your retirement. Not only does ShareBuilder let you open IRAs, but it helps you a personalized action plan around your retirement goals, current resources, investing style, and risk tolerance.
Then there are the stock reports. Probably the number one reason why I would recommend the ShareBuilder Advantage plan over the Basic plan is because Basic members do not get access to these invaluable resources for helping investors make smart investing choices that aren’t guided by sheer impulse and hype.
ShareBuilder is ideal for the hands-off investor who just wants to set the wheels in motion and then forget about it, letting their portfolio grow on its own with no severe impact on their lives in the interim.
It can also be good for periodic investors who are meticulous about their investing decisions and want versatile and advanced online, real-time research tools at their disposal. Plus, the cheap trades are hard to beat. If ShareBuilder sounds like a good match for you, check out their latest ShareBuilder promotion.
All posts by Ben Edwards