Comment by brk | Hacker News Reader

Comment by brk | Hacker News Reader

Most online places charge about $10 per trade. So even if you're putting $200/mo in, you're losing 5% immediately. Best choice would be to save up for several months and do fewer trades.

You really need to do better research, your statement that you don't want to learn about the stock market is a good way to guarantee that you never really make the kinds of returns you should. If there was a reliable, easy no-knowledge way to grow your investments, people would already be doing that.

A better option may be to look at some money market accounts. We have accounts with Ford Motor Credit and GMAC (now Ally). Check out http://www.ally.com/money-market-account/index.html it's not going to be the highest possible return rate, but there are no fees for "investing" your money, the funds are liquid, and as you get to higher balances you can get better returns. This is where we keep our "accessible" funds (low 6 figures).

Also, I'm not sure how much you're contributing to your 401K, but it may be worth bumping that up as well. You should probably at least be doing 10% of salary.

High-yield CDs would also be something to look at.

In short, for the dollars you're talking about, I would NOT consider anything that charged a transaction or maintenance fee, it would eat up any potential earnings.

> Most online places charge about $10 per trade.

I think the OP is talking about index funds, not stocks. If you invest in the fund that your broker manages, there usually isn't such a "purchase fee" for index funds, only some of the more risky funds that want you to demonstrate that you're willing to eat some losses in hopes of a bigger payout later. The bigger fees tend to be associated with more active management, which generally doesn't apply to funds that simply track an index.

I've never been charged this transaction fee on Fidelity Spartan 500 (or whatever it is called now), for example. Vanguard also has a pretty good reputation for their low- or no-fee funds.

Honest question: What's the logic behind keeping hundreds of thousands of dollars in a money market account? Is there a larger chunk of money sitting in places that earn a better return? If I had that kind of money sitting around that I wanted to use in the next couple of years, I can't imagine putting it in anything with less of a return than the low-risk Vanguard core funds. I don't know much about these things, so if I'm wrong, I'd like to know before I have money to lose.

When I said low 6 figures, I meant very low. We don't usually keep more than $150,000 (and it varies between $60K and $150K as things cycle) in "accessible cash". This is, for us, funds used to purchase a new vehicle, or deal with some around the house issues, or move to a new investment opportunity.

This is just an amount that, for our purposes, is enough to cover most random unanticipated issues without keeping too much money uninvested.

Sounds reasonable. Thanks for the information.

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