Q. I see that that the online services BUYandHOLD.com and Sharebuilder both allow investment club accounts, and they have lower commissions than almost any online broker. Are these good substitutes for signing up our club with a regular online brokerage?

A. These two firms, BUYandHOLD.com and ShareBuilder, both launched in 1999 with the goal of enabling investors to invest small amounts of money and buy shares of stock. With fees as low as $2 per purchase, investors could invest $100 or less and not see commissions eat up a disproportionate amount of their investment.

As their names imply, these services are aimed at helping investors to build a portfolio of shares over time using a buy-and-hold approach. They support regular investing (indeed, you may be penalized at BUYandHOLD.com if you do not make purchases each month) and let you own fractional shares in your account. Both services will allow you to set up monthly purchases made with cash transferred automatically from your bank account, too.

Not all publicly-traded companies are available for purchase, though each firm offers a list of more than 4,000 stocks to choose from. Both BUYandHOLD.com and ShareBuilder are designed for long-term investors, those who are less interested in timing their purchases or buying shares at a specific price than in building up a portfolio over time. Purchases and sales are made just three times a day at BuyAndHold.com and once a week at Sharebuilder.com. You can make real-time purchases for an additional fee of $15.95 at Sharebuilder, which is in the same ballpark as online brokers. Both companies offer a flat-rate plan for unlimited purchases, too.

These services are great for most investment clubs, but especially terrific for new clubs. (Unfortunately, ShareBuilder is not currently offering club accounts, but they may in the future.) My club invested in several dividend reinvestment plans (DRIPs) when we were just starting out, enabling us to invest small amounts and avoid much of the commission costs we'd otherwise pay. A BUYandHOLD.com and ShareBuilder account would be much easier and convenient than investing in DRIPs directly while still offering the same (or more) cost savings.

Assuming your club is focused on long-term, buy-and-hold investing (as I consistently advocate that every club should be), then these services can serve you quite well -- keeping your commissions low while letting you build a portfolio share-by-share, instead of requiring large purchases at an online broker just to keep the commissions to a reasonable percentage of your overall portfolio. Plus, if you'd truly like to take advantage of dollar cost averaging, there's no easier way than to set up automatic investment plans at one of these services.

Recently, both firms changed their commission and fee schedules, BUYandHOLD.com generally raising their fees while Sharebuilder lowered theirs. Sharebuilder is operated by Netstock Direct, a Web site that provides information about dividend reinvestment plans (DRIPs) and direct stock plans (DSPs), and their costs are somewhat lower for most investors.