3. Choose a Custodian (discount broker) if one has not already been chosen, and open and fund your account.

I’ve already covered the reasons I recommend using a discount broker, but here’s a quick review.  Our methodology is based on broad diversification and rebalancing frequently when the markets move away from the model’s target asset allocations. Unlike the rebalancing frequency recommended or offered by traditional brokers and advisors, this might mean rebalancing monthly, or even weekly. So, trading costs are a huge issue and must be minimized to gain the benefit of our approach.

Many of my firm’s clients use Interactive Brokers, Charles Schwab, or Scottrade. There are other fine discount brokerages out there, and you can find comparisons and evaluations of them elsewhere. You would do well to research their commissions and fees to find which one best suits you. Firms like Schwab, Scottrade, Fidelity, Interactive Brokers, and others, even have Exchange Traded Funds (ETF’s) that are commission free for their clients. Find out which firm has the most commission-free ETF’s that correspond to the ones we use in our portfolio, and you may have found your discount broker! Don’t forget financial strength and stability, customer service, small-print fees, and other criteria for your evaluation! Do your homework.

After selecting the Custodian of your choice, open and fund the account, and you’re ready for the next step!