Today I created a new no fee portfolio with LOYAL3. One of my goals for 2015 is to contribute $50,000 to my Investment Hunting Portfolio. LOYAL3 is a no fee broker, which means anyone can start a no fee portfolio with LOYAL3. There are no fees on stock purchases or stock sales. Additionally an investor can get started with as little as $10 dollars. Does this sound too good to be true? There are some drawbacks. L3 is bringing the crowd source model to investing. By this I mean, the company purchases stocks in bunches every few days.
So if I put an order in for 50 shares of Pepsi, my trade will not execute until the company makes a bulk purchase of Pepsi stock. The same goes for selling securities. Also, LOYAL3 does not allow for ROTH or IRA investing at this time. For an investor who turns over stock in small windows of time, LOYAL3 is a poor choice. For a value, dividend investor LOYAL3 is a great way to acquire stocks without any fees. I plan to hold any company stock I purchase using L3 for at least 10 years. Because of this I am not concerned with a quick buy or sale. I could use my ETRADE account to do the same thing, but I will be charged $10 for every buy. ETRADE is a better tool for me to use when I purchase $1,000 or more at one time.
My LOYAL3 Strategy
I plan to use LOYAL3 to buy positions in companies that I want to add to my long-term growth portfolio. I have set up monthly automatic investing to buy $100 of McDonald’s, MCD and $100 of Wal-Mart, WMT. Both stocks are trading under $100 per share. The remainder of my monthly investment will buy fractional shares. This is a great way for me to slowly build positions with these two companies without noticing a major hit to my bank account. By the end of 2015 I will have 11-13 shares of each company. My plan is to add two new stocks to my new no fee portfolio with L3 every year until I hit $1,000 a month in investments, or 10 companies.
Full Disclosure: Long on WMT and MCD.
What are your thoughts on LOYAL3 and my choice of adding McDonald’s to my portfolio?