Over the past few months I’ve invested in 12 different individual stocks. (And I have my eye on at least 6 more, but it will take more time before I’m able to purchase those.) All of the stocks that I chose were trading at $150 or less at the time that I bought, since that was one of my requirements. (Most of them were actually closer to the $50-$60 range.)

I knew I wanted a large variety of individual stocks, which meant that they needed to be reasonably priced to begin with for a variety of reasons.

One of those reasons is fees.

I currently have accounts at Sharebuilder and USAA. Sharebuilder’s Basic plan includes real-time trades at $9.95 per trade and automatic investments at $4 per trade. They have other plans as well. USAA’s plan gives you 25 free trades and then pricing moves to $6.95 per trade. Their trades all appear to be real-time.

My trading costs so far have gone like this:

8 trades at $4 each – Sharebuilder
2 trades at $9.95 each – Sharebuilder
2 trades at $0 each – USAA

That’s $51.90 total. With the $55 I received for signing up at Sharebuilder, I’ve actually come out $3.10 ahead.

But of course that’ll change.

For example, when it comes time to sell, I’ll have to pay $99.50 to Sharebuilder and $13.90 to USAA, bringing my costs to $113.40. So the value of all of my stocks must increase by at least that much just to cover the cost of trading.

Since I have invested $1812 to date, a few hundred dollars at a time, this means that my stocks must increase in value by at least 6.258% before I break even.

To someone that’s happy to get 4 point something percent on bonds and 3 point something on money market accounts, this sounds pretty risky. Every time I buy some stock, I start out in the hole. So my instinct is to buy greater quantities of fewer different individual stocks. But a louder voice in my head tells me that is wrong, wrong, wrong! The more baskets I have, the better. Spread out the risk across a variety of industries. Spread out the risk in the various industries across a variety of companies. Take a deep breath. I’m in it for the long haul. Research, be sure it’s money I’m willing to lose, and then buy.

But ow, the fees. I can’t help but think how much easier it would be to hit profits if I had $18,000 to invest over a few months instead of $1800. My fees would still amount to $113.40, but my stocks would only have to increase in value by just over half a percent instead of by more than six percent before I would reach the break-even point.

Of course, there is Zecco, which offers 10 free trades monthly. But you have to have at least $25,000 in stock equity there to qualify, so the free trade portion will have to wait a LONG time. Meanwhile though, I think I’ll sign up for their regular account, which offers trades at $4.50 each. The lower the fees, the lower my break-even point. And I can gradually build up my account.