Silly Question about ETFs

[rohitkhannaesq]

We have a Robin Hood stock app account (commission free trades) for playing around with stocks and have purchased 1 share of VXUS, BND, and VTI, respectively.  We are only dumping a $100 per month at the moment and will most likely increase this amount in the future.  My question revolves around the timing of purchasing ETFs.  Should we be purchasing them on a monthly basis i.e. buy as much as we can with $100 per month or should we purchase them once or twice per year when there is enough money in the account to purchase more than 1 share of each ETF?  Ideally, I would like to build a small portfolio using ETFs through the Robin Hood app.  We are putting $1200 per year, total, in this account and wanted to know the best strategy for the ETFs.  This Robin Hood account is irrespective of our taxable account, backdoor Roth IRAs, 401ks, HSA, etc.

Any advice would be greatly appreciated. Thanks!

[Zaphod]

rohitkhannaesq wrote:

We have a Robin Hood stock app account (commission free trades) for playing around with stocks and have purchased 1 share of VXUS, BND, and VTI, respectively.  We are only dumping a $100 per month at the moment and will most likely increase this amount in the future.  My question revolves around the timing of purchasing ETFs.  Should we be purchasing them on a monthly basis i.e. buy as much as we can with $100 per month or should we purchase them once or twice per year when there is enough money in the account to purchase more than 1 share of each ETF?  Ideally, I would like to build a small portfolio using ETFs through the Robin Hood app.  We are putting $1200 per year, total, in this account and wanted to know the best strategy for the ETFs.  This Robin Hood account is irrespective of our taxable account, backdoor Roth IRAs, 401ks, HSA, etc.

Any advice would be greatly appreciated. Thanks!

Click to expand...

So you are maxing out those deferred accounts and have a taxable as well?

If the above is true then I am not seeing the point of the RobinHood app, its just another taxable account.

 

[rohitkhannaesq]

Correct...it is a second taxable account that I would like to eventually turn into our primary taxable.  The current primary taxable account is "managed" by our FA - I know, I should drop them like a bad habit, especially with the high ERs, but before we do that, I'd like to prove to the Mrs. that we can do it on our own with the Robin Hood account, thus my question about how best to purchase/hold onto the 3 ETF portfolio.

Thanks in advance!

[VagabondMD]

Here's a silly answer:

From my own personal experience with FAs, when you start to cheat on your FA (spouse), it's time to leave your FA (spouse). No, I have not cheated on my spouse, but the mindset is similar. Better to walk away like a mensch than to cheat!

[Zaphod]

I would put your taxable into a real broker for one thing, like Merrill or someone else similar. If you have enough assets at BofA, >100k, 100 free trades a month so there is no problem in that regard either.

Agree with Vagabond, just drop them. I mean you can easily just mimic what they do with lower cost funds and dont have to prove anything. Its going to be hard to show much using such small nominal amounts, if you try, make sure to use % change since it wont look good nominally. Even though we know this, it still has a behavioral effect.

[Craigy]

From what I understand, there is some intraday volatility in whether or not an ETF is over or under valued, but from a commission standpoint, if the commissions are free, the commissions are free.  You can buy one share at a time.

Now if your commission-free trades run out, you might want to bundle purchases together.  $7 or $10 to buy one $100 ETF is a pretty big load.