Comments on: Trades – February 2015 Loyal3 Portfolio Purchases

By: writing2reality

writing2reality — Mon, 09 Mar 2015 14:38:14 +0000

Loyal3 definitely has some pros and cons, no doubt about it. People have been leveraging DRIPs for decades, and Loyal3 offers a cheaper spin on the same concept for several great companies. Just makes sense for me and the ‘side’ portfolio I have going.

Thanks for your thoughts and welcome to the blog!

By: Jon

Jon — Mon, 09 Mar 2015 13:32:30 +0000

I see the pros and cons of using a service like loyal3. At the end of the day though, I agree with the point that getting the price of a stock tomorrow versus the price today isn’t a huge deal. These are large, well run companies and buying a few shares for $0.20 more isn’t going to be material in 50 years when you total everything up. Everything has its drawbacks. As long as you are aware of them and they aren’t an issue for you, then it makes sense to use the service/product.

By: writing2reality

writing2reality — Fri, 06 Mar 2015 19:17:56 +0000

Sharebuilder has been a great asset to many DG investors, allowing them to invest smaller amounts into each company with a fraction of the cost of traditional purchases. I enjoy being able to split between traditional and ‘side’ portfolio purchases, and the goal is to turn both of them into nice looking assets that work together to generate some serious passive income.

Thanks for stopping by DGJ!

By: Dividend Growth Journey

Dividend Growth Journey — Thu, 05 Mar 2015 22:52:22 +0000

Nice purchases W2R. Just like you, I have another account at Sharebuilder where I have weekly purchases in small amounts. This account is aside from my Scottrade account where I make bulk purchases (~$1500) as and when feasible. The good thing about the weekly purchases is that it has allowed me to build a reasonable sized portfolio with small purchases on a weekly but consistent basis. My sharebuilder portfolio is now worth over $8000 in a span of 6 months and is having a decent dividend payout.

By: writing2reality

writing2reality — Wed, 04 Mar 2015 22:07:24 +0000

Thanks DivGuy! I think there are some nice perks of having a ‘side’ portfolio as robust as this one. Depending on how things go, I can see this growing into its own animal over the years.

I appreciate you reading and commenting today!

By: writing2reality

writing2reality — Wed, 04 Mar 2015 21:59:34 +0000

The three-day hold is actually pretty standard at most brokerages for new deposits. I use TradeKing for my traditional-style dividend growth accounts, and there is a ‘soft’ three-day clearing period on stocks sales. This is because they don’t want you withdrawing the money without the transaction clearing. They will allow me to reinvest into a new position, since that is easier to liquidate if need be.

With Loyal3, I don’t even transfer the cash in manually, and it takes only a day or so for a transaction to process from start to finish. It used to take a day or two longer but they’ve reduced the time.

As for forcing habits, if you look at either brokerage, they don’t benefit from frequent trading by users. The more frequent the trades, the more expensive it is to operate since trades cost money and they aren’t charging fees. Given the lack of revenue sources for Robinhood, there seemingly extra long holds are most likely a means of throttling transaction volume.

Thanks for sharing your thoughts Charles!

By: DivGuy

DivGuy — Wed, 04 Mar 2015 21:03:02 +0000

Nice purchases for the month! Looks like you found what works for you! Great to hear

By: CharlesMakesCents

CharlesMakesCents — Wed, 04 Mar 2015 14:36:16 +0000

Hi W2R,

It’s interesting about the batch purchasing and generally slow processing for these “hyper discount” brokerages. You and I previously mentioned this as well on my post where I reviewed Robinhood Financial on my blog (http://youandmemakecents.com/2014/12/robinhood-a-game-changer/) and noted the same thing–trades process in a few minutes rather than nearly-instantly, and any sales/deposits take a full 3 business days to clear. The “free” trading is great for those of us who like to buy and hold, but it’d be painful as heck for someone who wanted to use it for low-cost day trading (or even week-long position trading).

Maybe they’re doing us a favor and forcing good habits on us I know that when I first got to RH I was tempted to do a little day-trading, but seeing my money sit in the clearing house for a week cured me of that pretty quickly.

Keep on saving,
Charles

By: writing2reality

writing2reality — Wed, 04 Mar 2015 13:08:56 +0000

At some point I’ll have to add some BRK.B. I think they will become a tremendous dividend payer in the future, and accumulating shares now isn’t a bad way to go. Just have to absorb the lack of dividend until later. Just one more reason to love Loyal3, no fees to DRIP into a great company like Berkshire.

I’ve been surprised by how much appreciation has impacted even my small portfolio. Overall it is up 8%, which is pretty remarkable given the short time frame I’ve had assets in there and the fact that most of the money has been invested over the last six months.

Thanks for reading Scott, always good to have your share your thoughts.

By: writing2reality

writing2reality — Wed, 04 Mar 2015 13:05:25 +0000

Thank you sir! It has really added up in no time! I’ll be sure to let you know if any of my positions reinvest directly. Given that my KO position isn’t big enough, you’ll have to let me know for that one.

Always great to have you reading Ray!