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value average buying in taxable account

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  • value average buying in taxable account

    I recently opened a taxable account after putting max in 401k

    I wanted to buy more individual stocks rather than index, stocks like: PG, Disney, Berkshire, Apple, etc

    Is there a way recommend to buy them, once a month just buy x shares, no matter what the price?

    The only trouble I have with buying frequently is the commission that Fidelity hits me with ($4.95)



  • #2
    Some of those are dividend stocks and at your likely tax bracket it will be a huge drag tax wise.


    • #3
      Fidelity may have an account value, above  which the transactions are free. PB and BRK/B are value stocks;  are you seeking a tilt to value stocks?  As Zaphod mentioned, value stocks are less tax-efficient than growth stocks, wrt. the dividends.


      • #4
        This was the only thing I saw around your requirement/request:


        • #5
          Are you sure you wouldn't be better off with a tax efficient investment like a total stock fund in taxable and then individual stocks in your 401K?  I am guessing from your title that you read Value Averaging by Edelson.  If not, start there.


          • #6
            If you are going to buy individual stocks in your taxable account a $4.95 commission should not be significant.  If you find $4.95 to be a lot of money do not buy individual stocks.


            • #7
              If you have to buy individual stocks, do it in your deferred space and put the etf in the taxable. Its just more tax efficient.


              • #8
                If it's not clear why holding dividend payers in a taxable account is less than ideal, read this post on dividends and the now 5-page Bogleheads discussion thread it spawned.