Investing with Sharebuilder-Part II

In Part 1 of Investing with Sharebuilder, we discussed how to open a new account. Now, we'll explore choosing and setting up the right investment plan for your needs. With time, research and careful consideration, you can create an investment program that will allow your cash to work for you without alot of hassle.

Look at the Account Features. Sharebuilder offers Basic, Standard and Advantage accounts. To start out purchasing stock in just one company, you might consider sticking with Basic, as your fee will only be $4 per investment. The Standard and Advantage accounts, which have monthly fees, offer a certain number of trades at no charge, then charge a smaller fee for any additional trades. The Standard and Advantage accounts also give you access to specialized research tools, and discounts on margin trading.

Review the Pricing. The Basic account offers $4 per trade. So, if you buy stock once a week, it would cost you $4 per week ($16 per month) to buy as much of one stock that you want. If you decide to invest in several stocks, however, you will see considerable savings by choosing the Standard or Advantage accounts, which offer 6 or 20 free trades per month, and $2 per additional trade on Standard, or $1 per additional trade on Advantage. Real-time trades (Buying or selling transactions that you want to carry out immediately) and options trading each cost $9.95 per trade. Phone trading is a bit more costly at $19.95 per trade. The Standard account monthly fee is $12 per month, while the Advantage program costs $20 per month.

Begin by setting up your account funding sources. Click on the Account Profile tab, then under Account Preferences choose Add Checking/Savings Account. Enter the account type, routing number and account numbers for the bank account that you will be using to fund your stock purchases. You can also choose to fund your Sharebuilder account through wire transfers or via check through postal mail.

When you are ready to choose stocks, click on the Trade tab. Search and choose the stocks you want to purchase. Next, set up your automatic investment plan by clicking on the Automatic Investment link, then on the next page, choose Manage Plan. You can create your own plan or get help by using Sharebuilder's Portfoliobuilder investment planning tool.

Next, choose day and frequency with which you want to invest (weekly, monthly, twice monthly). For the Standard and Advantage plans, the fee is monthly. For the Basic plan, the $4 fee is deducted from the amount you invest (per stock). For example, if you invest $20 per week in shares of Sirius XM Radio (SIRI). The transaction will reflect $16 in purchased shares at that day's trading price and the $4 trade fee. When you invest in multiple companies, those $4 fees will add up quickly, so choose the plan that will best suit your investment needs without racking up needless fees.  Finally,all you need is to ensure that funds are available for EFT transfer, or send money via transfer or by mail before your scheduled investment dates.

While account setup is fairly simple, you need to choose your investments wisely. Research companies through Sharebuilder and through financial news websites such as Motley Fool or Morningstar. Even if something seems like a safe bet, it's best not to sink all your money into one stock or fund. Diversification will help protect you if the market experiences declines. Make sure that you read all the Terms & Conditions and any other policies of this or any website before joining to be certain that you are in agreement and understand all the procedures, fees and other rules of the site.

Visit Sharebuilder to learn more.