Foliofn and ShareBuilder Contests for Number One

Foliofn is a company which makes use of the Internet in order to enable smaller individual companies to invest better and easier. Foliofn is practically the first in a long line of financial services which combines some of the best features of mutual funds, online trading and traditional brokerage services.

The twice-daily window trading system of Foliofn helps keep commissions as low as possible. The savings can thus be passed on to customers. Those who are searching for a long-term investment strategy would find this an ideal solution. More often than not, customers can easily get better execution prices and increase their savings as Foliofn would invariably attempt to match customer orders between the bid and the ask price internally. Also, customers always have the option of trading at any point of time by sending orders directly to the market at the rate of $14.95 per trade.

Investing in Foliofn means you can make up to 200 online trades in a month for just a fee of $199 a year. This is much more than what you will need even if you add money to the account every month.

ShareBuilder on the other hand, charges around $15.95 to sell a stock. This amount might not be a problem for the Drip-type investors; however if you feel that you will be an active trader, you might have to think again.

These are some of the features of investment with ShareBuilder.

• A $4 commission with no subscription fee.
• A discount on commissions
• Periodic promotions through which it is possible for you to make hundreds of dollars.
• As ShareBuilder uses scheduled fund transfers, scheduled purchases never suffer delay.
• Free dividend reinvestment
• You can buy fractional shares with ShareBuilder.
• You can use the Express Funding option to fund your account on the same day.

The downsides are:

• The discount on the commission is available only on Tuesdays and is not that low for batch purchases according to some.
• There are no bi-monthly or quarterly automatic investment plans; only scheduled investments which are weekly or monthly.
• There is no mutual fund investing. This is a major drawback especially when you consider the number of no-fee mutual fund options available.

However, before you invest in either of these, you have to consider whether the plans suit you or not. The bottom line goes that your trading cost should never exceed 2% of your total transaction. Since the lowest fee available for both ShareBuilder and Foliofn is $4, you will have to invest in at least $200 at a time in order to stay within the limit.

Asha Prakash

Hi-Tech Editorial Division