This is probably a pretty basic question, but I'm 35 and just started a Roth IRA last year which I maxed out. I earn some monthly income from advertising that runs on a website I own, and I'd like to funnel this money into my Roth IRA. That'll cover about $3,600 a year of my max investment for my IRA.
RIght now, I've got everything invested in VFINX (Vanguard S&P 500 index fund), which I like. I'd like to add to this in small amounts, but there's a $19.99 commission fee for every trade. I get about $300/month so if I invested that every month, I'd be eating about 6.6% of my money right off the bat. Doesn't seem like a very good idea to me.
I recall reading somewhere that as a baseline, you don't want to pay more than "X" percent of your investment in commissions/fees, I just can't recall what that percentage is. Obviously there's some common sense that applies that says "as low as possible". However, if I wait say, 4 months to have $1,200 and bring my percentage down to around 1.6%, I lose out on 4 months of investing while it sits in cash. That doesn't seem like a good idea either.
Anyways, I like the index funds because I don't have to think too much about it to get a little diversification. I have a 401k that I max out also (up to my company match limit) that is almost all in T. Rowe Price's 2040 Target Retirement Fund. I just started the 401k this month so I don't have a lot of experience with that fund.
So my question boils down to this...I have $300/month being deposited into my Roth IRA account. I like the index funds (and maybe the 2040 retirement fund) because I don't have to have a lot of experience or research to get some diversification (I know very little about picking investments). What's a good way to invest that $300/month as soon as possible without paying too much in commission?