It's not some kind of candy, it's a website offering commission-free trades, relying on interest on deposits and ad revenue to cover the $2/trade cost, and relying on news stories and word of mouth to gain customers. There are some limitations, however, like only 10 trades in one day, or 40 in a month ($3.50 for each trade above that).
Why choose Zecco for magic formula investing? First, let's review the magic formula itself. It requires you to buy 5-7 stocks every 2 or 3 months, and sell them about a year after purchase (sell losses before the year is up, and gains after a year, for tax purposes). This gives you 60 buys and sells in one cycle. When you sell, you're also going to be buying the same number of stocks to replace the ones you sold, so once you get started, you have months with 10-14 transactions occurring every 2-3 months.
Running the numbers with Sharebuilder, you can buy 6 stocks in a month for $12, with the standard subscription, which isn't too bad. But to sell those 6 stocks a year later will cost you $14.95/each, or $89.70. If you time your purchases to 5 months with 6 buys per month, you'll incur $12 X 5 = $60 for the purchases, and 30 X $14.95 = $448.50 for the sales, for a grand total of $508.50. I don't know about you, but that isn't an inconsequential amount of money for me. Foliofn and other similar sites will cost similar amounts, due to the monthly fees.
What about Tradeking, with $4.95 trades? That will still run you almost $300 for 60 trades, or $50-$70 every 2-3 months. It's hard to beat free.
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2 comments:
let me guess- spendlesssavemore is a marketing person at zecco? or the founder?
nothing like the "editorial integrity" of blogs to push the corporate interest. i dare you to publish this comment, knowing you never will, since this is obviously a zecco-hosted frame. big difference between real blogs and fake ones.
you guys are tooo clever.
Here's Zecco's list of backers and here's the list of management. I can assert I'm not one of them, but there's no way to prove a negative. Nor am I in marketing or in the employ of Zecco. My only relation to Zecco is as a new customer, excited about saving a little money on commissions, which can take a big bite out of a small investor. It's nice to buy a stock and not immediately be in the red on the deal.
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