Saturday, November 24, 2007

ING makes a good move

My favorite broker, Sharebuilder, is being acquired by ING. Sharebuilder wasn't public, and its growth over the last few years has mostly gone unnoticed.

With its features directed at long-term investors, Sharebuilder is the perfect vehicle for betting on growth or takeover targets. I had mentioned it in a couple of very early posts, one on investing discipline and the other on the eternal question of beating the market. I have influenced at least a dozen people to sign up with Sharebuilder. Despite its steady growth one concern that occasionally surfaced was a lack of a prominent financial house backing it. That is now solved. Who better than ING to ensure Sharebuilder remains committed to small investors. ING showed the way with its high-interest accounts even as other banks were fleecing customers. Hopefully, ING would be able to bring investing costs at Sharebuilder further down.

There are still ways in which Sharebuilder can improve in terms of its offerings. For example, there is no way right now to request automatic dividend reinvestment for particular stocks instead of for the whole account (Schwab allows it). In addition, there is no graphical display of performance of a portfolio against some index (FolioFN has such a feature). But more importantly, none of the brokerages seem to get gain & loss calculations or tax optimization right, even when some of these are handled via an external service. I would rather have somebody like Cake Financial handle it for all brokerages. Hopefully, they can handle such simple and regular events like splits, spinoffs, renaming and dividend/capital distribution right!


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