The following interactive calculator helps you compare fees at Discount Stock Brokers.
You can check which type of account -
Stock Basket
or Pay as you trade - is best suited to your investment strategy and activity.
This can give you a quick glance at how much you
can save with a Stock Basket and whether this is a worthwhile choice.
Directions:
Choose the number of Investment Strategies you want in your Portfolio
Enter an Investment Amount for each strategy
Enter a Nb of Stocks for each strategy: you will unlikely benefit with more than 50
Enter a Rebalancing Frequency for each strategy (weekly, monthly, quarterly, yearly)
Enter a Turnover Rate for each strategy: this is the percentage of stocks that
will be replaced at each rebalancing. Each Stock that is replaced generates a Buy and a Sell.
See Rebalancing for an indication of
the optimum Rebalancing frequency for various Investing Styles.
Example:
The default settings assume a 35,000$ Portfolio investing in 2 strategies:
a 25,000$ strategy with 25 Stocks, annual rebalancing and an expected turnover
of 70%. This simulates a Value Investing Strategy.
a 10,000$ strategy with 10 Stocks, quarterly rebalancing and an expected
turnover of 70%. This simulates a Momentum Investing Strategy.
The Portfolio generates 25*70%*2+10*70%*4*2=35+56=91 transactions per year (half
Buys, Half Sells)
Tip: if you want a rebalancing period >1year, use yearly rebalancing and reduce the turnover rate.
e.g. if you want to rebalance every over year, use yearly rebalancing and reduce the turnover rate by half Note: The calculator is not suitable for Buy And Hold strategies.
Remember, these are just brokerage fees: investing involves other fees
such as Bid-Ask spread, Tax. If you're a Momentum Investor
with short rebalancing frequency, you may want to check Tax
Secrets for Traders for tips on minimizing your Tax bill when trading.
