Using the above example, you could have 30 stocks (assuming none are funds, which would carry a management fee), and with each one costing $1 per month to invest in, your still looking at $360 per year in commissions. However, not only would you have to actually chose 30 securities to begin with, but it leaves you exposed to very high risk, even if you diversify by country, sector and market cap.
This creates an unrealistic situation. While this is an incredibly cheap form of investing, it would take a lot of time for a typical investor to narrow down an effective, diversified 30 securities in which to be invested.
This is why paying a simple management fee makes sense. While these fees can get extremely expensive, they can also be dirt cheap. Take, for example, this list of the 100 cheapest ETFs.
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