Need a quick check on investing some money (in SDY)

[dvalley]

I have some un-invested money sitting in my taxable brokerage account (Scottrade and Sharebuilder) and some in my IRA (Fidelity) too. Instead of hand picking dividend stocks I'm thinking of buying some SDY using dollar-cost-averaging and with a buy-and-hold strategy. Any thoughts on that and whether I should have this in my taxable account or tax deferred? (some relevant info in my signature).

Second, from the commission and dividend reinvestment perspective what is a good place to buy SPDR funds? Not sure what Fidelity or Scottrade will charge over the long haul.

Thanks

 

[dvalley]

For some reason the signature didn't show.

 

[Animorph]

I can't answer for Scottrade, but Fidelity has a minimum account value of $2500 and will charge you $7.95 per buy or sell order unless you are using their commission free ETF's. There are no yearly fees or anything like that. So no "long haul" charges unless you have transactions.

It can be better to hold non-dividend-paying shares in taxable accounts so that you don't get the associated tax drag. However, if they are mostly qualified dividends and you remain within the 15% tax bracket they might be taxed at the 0% rate. In that case the taxable account works great for it.

 

[dvalley]

Thanks for the feedback Animorph. I figured even if I'm taxed on the dividends that's always better than losing value to the inflation