One of great things about the new commission pricing at online brokerage firms is that it frees you up to give your portfolio the tough love it needs when the markets are falling.
At many firms, investors with accounts below $50,000 in assets used to pay a minimum of $29 to buy or sell a stock online. Now, almost all brokers charge a flat $10 or less for everyone. That's low enough to permit investors to make portfolio adjustments in a down market without concern about adding to their market losses by incurring big commission charges.
First, think about dumping stocks that don't fit into your plans any more, maybe because they've been exposed lately as more risky than you previously thought. It might seem onerous to pay $29 in commissions to dump a losing stock. At $10 or less, this type of pruning is much more affordable.
Low commissions also invite you to add to core positions in stocks and exchange-traded funds. Don't obsess over getting in at the market bottom. Instead, think about an averaging approach where you make a series of purchases at different market levels. Multiple buys on the same stock or ETF now make financial sense, unless you've got an especially small account.
Finally, low commissions make it a lot cheaper to rebalance a portfolio by trimming winning positions and adding to core positions that have fallen in price. You should rebalance at least once per year, and possibly twice. The goal: Adjust your holdings so that they return to the mix you targeted when you set up your portfolio. Example: If you're now underweight on Canadian stocks, buy some more.
Brokers have cut their stock-trading commissions, but some retain fees for accounts with assets of less than anywhere from $15,000 to $25,000. Check your firm's fee schedule to see if this is the case, and then see if your account balance has declined lately to a level that puts you in danger of paying fees. Adding some cash to your account to keep it in the no-fee zone can help you avoid a charge of as much as $100.