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Capital One Investing Review

Capital One Investing, formerly known as Sharebuilder, offers many important features for a dividend growth investor such as myself. In this Capital One Investing review, I discuss some of the those features. These include the benefits of automatic investing, fractional shares, the advantage pricing program, and more.

I chose Capital One Investing because it suits my very particular needs. There are many options to choose from. Other brokers have more competitive pricing, better research tools, more robust trading platforms, etc. However, while not all brokers are created equal, either are all investors. We each have our own goals, desires, risk tolerance, etc. When choosing a broker, an investor has to consider what factors are important and which broker is able to meet most, if not all, of the investor’s need.

Hopefully, this post will help you understand why I chose Capital One Investing as my primary broker. Although it’s my primary, it’s not my only brokerage firm. You don’t have to choose just one (and probably shouldn’t). Also, this is a follow on from my previous post on The Perfect Broker.

Let’s get started. Here is my Capital One Investing Review.

Automatic Investing

This is definitely one feature that sets Capital One Investing apart. The ability to automatically invest dollars on a monthly basis is awesome. Sure, other firms allow automatic investing in mutual funds or ETFs, even at no commissions. But, I want to automatically invest in stocks. Capital One Investing is one of the few brokers that allows you to do just that.

Of course the downside is that Capital One Investing only purchases stocks on Tuesdays, using this approach. So, I’m subject to the whims of the stock market that day. But, in the long run, I don’t think this should be a big of a deal. With my investment approach, I’m not trying to time the market.

Fractional Shares

Consistent with the ability to purchase shares automatically with cash is the ability to purchase fractional shares. One thing I hated about Robinhood is that I would have to save up enough money to purchase one share of stock.  Inevitably, I constantly have small amounts of cash sitting in my brokerage account unused. With Capital One Investing, I’m able to purchase fraction shares of stock with that small amount of money. That means, 100% of my cash is working for me all the time.

Advantage Price Program

This was one of the main reason why I went with Capital One Investing. I’m able to get 12 trades per month for $12 per month. Now, that might sound expensive (and to some extent it is), but here me out. Ordinarily, under the basic plan, trades costs $3.95 using automatic investing. Right now, I have three stocks (outside of a Direct Reinvestment Program) that I invest in. Were I to use the Advantage Price Program for those three stocks, my trades would cost a total of $11.85 in commissions. However, three stocks is not nearly diversified enough. As my portfolio increases, so will the diversity of the stocks I own.

So, if I invested in twelve separate stocks, that would allow me to be more diversified. Moreover, the effective commission cost at that point would be $1 per stock I’m invested in, which I think is reasonable.  As early as May, 2017, I plan on increasing the number of stocks I invest in. Around August or September, my portfolio should also sky rocket based on projected lump sums of money that I will have access to. So, I intend to fully utilize the Advantage Price Program of Capital One Investing.

Now, I know there are cheaper alternatives out there, including Robinhood that I use and that offers free trades. It doesn’t get more than free. As explained in my post, The Perfect Broker, Robinhood doesn’t offer the automatic investment option or fractional shares that I desire. I want to be able to set it and forget it, and Capital One Investing allows me to do that at a relatively inexpensive cost.

I know what you must be thinking. $12 a month is $144 a year and, given the size of my investments so far, that’s a steep expense to pay just to invest. So, if I were to invest only $100 in one month, but have to pay $12 in commissions, that’s a 12% expense. I would have to make $12 on my investment just to break even, and that’s an unwise approach. Instead, I should keep the effective cost of my investments low.

So, one option is of course to find cheaper alternatives than $12 a month which readily exists in today’s marketplace. Another option, is to increase the amount I invest in per occasion. So, rather than invest $100 a month, if I invested $1200 a month, then that $12 that I’m paying in commissions would only represent a 1% expense ratio, which is much better. Clearly, this is simple math and no amount of rationalization on my part is going to change that basic truth. I completely agree.

However, here’s my thought process. Just yesterday, I spent $15 at a restaurant to eat pizza and drink sprite with colleagues from work. Granted, that $15 included a tip. But still, that’s a lot of money for pizza. The point is, and I hate to admit it, but I waste money all the time. Even with my Conscious Spending Plan, and even though I am saving more than I ever had, I still waste money.

As another example, I go to Starbucks regularly. So much so that I’m thinking about investing in Starbucks’ stock. Two trips to Starbucks costs me about $12. When David Bach talks about the Latte Factor in his book, The Automatic Millionaire, I feel like I’m the person he was talking about. My plan is to take that $12 that I normally would have wasted anyway and use it to spearhead my dividend portfolio. That $12 will allow me to get most of the things I value in a Broker. These include automatic investing, fractional shares, low cost commissions, and stress free filing at tax time.

Without the Advantage Price Program, I doubt I would have went with Capital One Investing. I must say though that this option might not be available for new customers. But, as an older customer of theirs, I’m able to utilize this pricing option.


I hate filing taxes, although I love getting tax returns. I won’t argue the merit of not having a big tax return when filing taxes. Sufficed to say that I’d rather get a return than owe money, but that’s not the point of this section. The point is I hate filing taxes and anything I can do to make the filing process easier, I’m all for it.

I use Turbo Tax to file my taxes. I used to go to H&R Block to file, but one time, they wanted to charge me an arm and a leg because I invested in stocks (even though I had pittance at that time in my brokerage accounts). With Turbo Tax, I can easily upload the brokerage’s data to Turbo Tax, as long as the brokerage is a Turbo Tax Partner. That is another main reason why I went with Capital One Investing. They are a Turbo Tax Partner, and I can easily upload my information to them when filing my taxes.

The same is true for Computershare by the way. Computershare is the transfer agent for Exxon Mobile. I use their DRIP. However, even though I like Realty Income, I did not use Realty Income’s DRIP mainly because Wells Fargo Shareowner Services as their transfer agent is not a Turbo Tax Partner. This is a very important feature to me.

Customer Service

I honestly haven’t had to use Capital One Investing’s customer service too often. There website is pretty straight-forward. However, for the few times that I did call, I was mostly satisfied. Although their customer service was helpful, I don’t think they go out of their way to help you. For example, let’s say you qualify for a promotion. If you call customer service, they will answer the question you asked. However, if you don’t ask they won’t tell. So, if you don’t ask for that promotion (let’s say you were calling for something else), they won’t tell you that you qualify for that promotion.

I don’t mean to be vague or confusing. It’s just one thing I noticed about their Customer Service. They were pleasant, and helpful to my problems, but I don’t feel like they go the extra mile. I hope that makes sense. Obviously, I’m still recommending Capital One Investing despite that. Hopefully, you won’t have  a need to be calling customer service too often.

Bottom Line

There are very good discount brokers out there that offer tremendous value to their clients at competitive prices. However, as a full-time employee who is not a stock market guru, I wanted a broker that meshed with my investment strategy.  I went with Capital One Investing because it allows me to invest in the stock market using an approach that fits my needs at a price that I am comfortable with. For those reasons, I would recommend Capital One Investing.

The post Capital One Investing Review appeared first on Dividend Portfolio.

This post first appeared on Dividend Portfolio, please read the originial post: here

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Capital One Investing Review


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