How to Setup an Automatic Investment Plan
An Automatic Investment Plan (AIP) is offered by most brokerage firms. This do it yourself strategy uses a few simple principles which are ideal for beginning investors. It may also be possible to avoid brokerage fees entirely. The plan is to use Dollar Cost Averaging with automation, and look for the lowest possible fees. The idea of Dollar Cost Averaging is to select an amount to invest regularly, and something to invest in while ignoring the price fluctuations of the market. Since it is difficult to consistently time the market, or beat the market, a low cost index fund is an easy way to get started. Get Started Decide how much you want to invest each month, and then get started right away. You can always make adjustments later, but try to set it up as a "set it and forget it" type of investment. 1.) Open brokerage account(s) (Roth IRA, brokerage, Traditional IRA). Optional: Also open a free cash management, or checking account with the brokerage ...