Vodafone is the largest mobile telecommunications network company in the world, with equity interests in 25 countries and Partner Networks in a further 40 countries. At 31 March 2007, Vodafone had approximately 206.4 million proportionate customers worldwide.
Thanks for the info, Ill probably stay put with hargreaves, Its possible i wont deal att'all for the next year, so the £200 charge wouldnt work for me. Apart from that i guess i am a bit of an all or nothing kind of investor. But i think your £5 = £500 chunks makes a lot of sense.
I use iWeb ... managed to get in there before they increased the joining fee to a one-off £200.
But to be honest, if you're going to be investing over years the £200 is not such a downer as the rest of their service is absolutely first class ... limit orders, all different types, ISA and non-ISA accounts, telephone dealing, online spot price and deals ... easy transfers in/out ... costs are flat rate £5 per deal, low cost (2%) option for automatic dividend reinvestment if you want that.
Can't speak highly enough of them.
Ps. the drip will work regardless of costs, provided you buy in chunks of money that is about 75-100 times your dealing cost. (£5=>£500 chunks, £10=>£1000) Alternatively invest every 2-3 months, but a greater amount.
At £5, I can see it working, what broker do you use, is it £5 max per deal. Do they hold your shares for you, do you deal online, at best live price, & are there any other charges to have an account. thanks.
It's an interesting question ... and as always with interesting questions there's no easy answer.
Using my brokers charges of £5 per trade, usual 0.5% stamp duty ... yours will vary I'm sure.
I grabbed a full set of VOD prices for last year and built a spread sheet. Highest intra-day price for the year was 258, lowest was 201.25 ... depending on your psychology a single buy would hit the highest, for pessimists, the lowest for optimists or more realistically, something in between.
Assume you have £6000 for the year and you buy in one tranch ... you end up with eithe 2,963 shares or 2,312 shares depending on whether you hit the high or the low.
If you invest £500 per month, I chose the 15th or nearest trading day thereafter ... you end up with 2,624 shares at an average cost of (after dealing costs and SD etc) of 228. Interestingly the costs don't really get dominant until you drop to £300 per month or lower.
Conclusion ... if your 'drip' is approximately 100 times larger than your dealing cost per trade then drip feed or pound averaging is very effective and will give you a good average price through the year.
Very good point,Though ive never seen a broker that cheap. I think if you drip feed small amounts you have to use a very low cost broker. I use hargreaves, i think its 12.95 a trade. So to buy £100 pounds worth of shares is not worth it. The sp has to rise 13% just to break even.. I have a general rule never to buy less than 4k worth at a time.
Horses for courses, you have to have the right broker. One of mine only charges a quid or so providing you use their select buy day but you dont know what price you get. It good if you only have small amounts although I dont see why you cant do a large amount.
I saw one that did 50p trades aimed at traders who you could argue pay most charges but if your making a profit on each trade it matters less.
For me my capital is tied up by investing so I like divi shares so I have some cash coming in. You have to pick what you think works for you and your time horizon.
Same goes for ISA's you can argue the merits but they make the tax and cgt much more simple to deal with.
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