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Ramon Galvez
Ramon Galvez
04/13/2012 4:46 am

Is there any disadvantage to buying a small amount of shares. I mean, can you still be long with just 3 shares? I have 22 INTC which I bought at 20.44 don’t know if my “I’ll wait for it to go down again to buy some more” attitude is a good one. Thanks for the article.

Liquid
Admin
04/13/2012 8:39 am
Reply to  Ramon Galvez

Nice pick Ramon, I have Intel as well. Nice dividend for a tech company. From what I can see there’s no significant disadvantage to buying small amounts of shares unless liquidity is a big concern, for example I can’t sell a quarter of my Apple holdings because I only have 3. Another slight disadvantage is you can’t DRIP (>_<) But then again, DRIPing a stock like AAPL is no small achievement. My plan was if it dropped back down to $500 or something I would pick up 2 more shares but so far it looks like I don't have to. I'm long Apple all the way.

Not Working
Not Working
04/13/2012 6:25 am

What is your broker ? TD Waterhouse?

Liquid
Admin
04/13/2012 8:40 am
Reply to  Not Working

Correct (^_-)

Maritimer
Maritimer
04/13/2012 6:32 am

Nice detailed snapshot with the stuff in dark green. I wish my broker did this. It is not near as detailed as this. I guess that is why Questrade is $4.95(min)-9.95(Max) commissions of 1cent/per share.

Not Working
Not Working
04/13/2012 7:16 am
Reply to  Maritimer

Questrade support sucks hard it’s unbelivable

Liquid
Admin
04/13/2012 8:48 am
Reply to  Maritimer

That’s unfortunate. I’ve heard mixed reviews about them.

MyMoneyDesign
04/16/2012 5:55 pm

This is an interesting arrangement to which I have many questions. Does the percentage of what you own always stay the same, or does it decrease as the value of your portfolio goes up (as part of a fee)?

Liquid
Admin
04/16/2012 10:58 pm
Reply to  MyMoneyDesign

Good question. I think as long as you know how a mortgage works then you already know the answer (~_~) I believe the only fee the broker charges is interest for borrowing money. The percentage of the stocks you own doesn’t change if you don’t borrow any money. For example, deposit $1000 into a margin account, then buy $1000 of stocks. Since we bought the stocks using our own money we own 100% of our stocks. If our portfolio grows to $2000 then we still own 100% of that. But the percentage of our ownership DOES change if we borrow money and use margin. Same example, except we buy $1500 of stocks right away, which means our cash balance is -$500 since that’s how much we need to borrow after spending our own $1000. This means right now our ownership of the stocks is about 66.7% because if we sold the $1500 today, we have to pay the broker back its $500 so only $1000 is our own. But if our holdings grow to $2000, then we now own 75% of it, because we still owe the bank $500, meaning $1500 of that $2000 market value is ours (if we… Read more »