I was curious on the "Cafe's" response to BuyAndHold.com
recent changes to their fee structures. Seems like a good
deal for investment clubs (assuming a minimum of two trades
per month). But from an individual investor perspective, I
am shutting down my accounts as $84.00 per year for having
an account open seems excessive.

Actually, I'm kinda displeased with the costs personally.
Sharebuilder offers a cheaper alternative. I think that
BUYandHOLD should charge for inactivity. However, from the
financial statement it is clear that they're not making
money. Perhaps they should have fewer investment windows.
Anyway, I'm leaving our club's money at BUYandHOLD because I
figure that I can pursue some month trading screens and take
some tax-losses without having to figure out what the
transaction costs involved are. I may be more apt to hold
losses to a minimum if the club purchases a company at a
poor valuation (I try to prevent that, but I have to be
democratic about things just the same). All of that is
merely justification for the expenses, and not really great
decisions, but we'll deduct the expenses from our taxes and
with enough of a return on investment the extra costs aren't
going to cost us much.

From an individual investors perspective, I'd dump it and go
for Sharebuilder.com or individual mail-in DRiPs.

-Geoff



John M Jamrozy wrote:
> I was curious on the "Cafe's" response to BuyAndHold.com
> recent changes to their fee structures. Seems like a good
> deal for investment clubs (assuming a minimum of two trades
> per month). But from an individual investor perspective, I
> am shutting down my accounts as $84.00 per year for having
> an account open seems excessive.

John M Jamrozy wrote:
> I was curious on the "Cafe's" response to BuyAndHold.com
> recent changes to their fee structures. Seems like a good
> deal for investment clubs (assuming a minimum of two trades
> per month). But from an individual investor perspective, I
> am shutting down my accounts as $84.00 per year for having
> an account open seems excessive.

I think buyandhold still might be a good fit for some
investment clubs.

But I agree that the $84/year inactivity fee is a bad
deal for small, individual investors. These are exactly
the people who buyandhold sought in its early
advertisements.
Now, it has abandoned them because they don't trade often
enough for the company to make money. I think the name
buyandhold no longer fits. The new philosophy is
buyandbuyorpayanyway

I expect many individuals wil leave buyandhold. I personally
know 20 people who will close their accounts by June 1.

I think any club or individual has to make their own
decision,
but a look at buyandhold's financial statement would make
me turn and run in the other direction. I don't think the
company
will be around much longer. And seeing how it has betrayed
the people responsible for its rapid growth in customer
base, I
think that is justified.

I'm the accountant for our club, and I'm trying to figure out what is the best way to record the new fee structure. Do I just make the monthly charge an expense and record the first two purchases each month with $0 fees? This doesn't seem to make much sense, because it doesn't reflect the true cost of the stock.
 
On the other hand, if I split the cost between the trades, what if I only have one trade in the month, does the trade then assume the entire $7?
 
Help!
 
Thanks
 
Lee Tan
 
John M Jamrozy wrote:
> I was curious on the "Cafe's" response to BuyAndHold.com
> recent changes to their fee structures. Seems like a good
> deal for investment clubs (assuming a minimum of two trades
> per month). But from an individual investor perspective, I
> am shutting down my accounts as $84.00 per year for having
> an account open seems excessive.

Lee Tan wrote:
>>
 I'm the accountant for our club, and I'm trying to figure
 out what is the best way to record the new fee structure.
 Do I just make the monthly charge an expense and record the
 first two purchases each month with $0 fees? This doesn't
 seem to make much sense, because it doesn't reflect the
 true cost of the stock.
>>

Expenses are recognized as a commission only when the charge
is transaction specific. Since the BuyAndHold fees are the
same regardless of the number of transactions, the charges
must be recognized as fees [expenses], rather than
commissions.

Rip West
trez_talk@bivio.com