ATLANTA, GA (Jan. 10, 2000) -- A while back, I decided to write a series of columns about companies I called "Pathfinders." These are companies that are opening up the paths to the Internet and changing the way we live. I figured it wouldn't be too hard; few of them pay a dividend, and there aren't a whole lot of them with direct investment plans. I wouldn't have to "worry" about Cisco (Nasdaq: CSCO), Microsoft (Nasdaq: MSFT), Yahoo! (Nasdaq: YHOO), and so on. This would make the whole project much easier.

Well, nothing ever works out as it is supposed to, and just after I started the series, I heard this awful rumor. Some companies were going to come out and allow us to "Drip the Undrippable." I was a bit skeptical about the concept. A number of questions came to mind. How easy would it be to open an account? What would the minimum investment be? What kind of fees would these plans have? How often could you buy or sell? How would I ever cover all these added companies?

One of the first companies to offer this service is BuyandHold.com. It is based totally on the Internet -- you reach them at www.buyandhold.com. Let's get down to business and answer the questions.

How easy is it to open an account?
I was able to open an account online. You fill out an application, which requires you to answer a number of questions required by the SEC (your net worth, goals for investing, etc.), and you have to print out a form requiring your signature. You send this in with a minimum initial deposit of $20. Since Stockpower and Netstock don't require you to send in anything to open traditional direct investment accounts with them, this is just a hair down from the top of the Easy Scale.

What is the minimum investment?
Only $20. However, I would invest more than that because of the fees.

What are the fees?
They're $2.99 for each order. So, if you only invested $20 at a time, you would be paying 15% in fees -- on a percentage basis, that is too high. If you want to keep your fees at a maximum 2% of your investment (which the Fool advises), you need to invest $150 each time. I don't worry about the 2% "rule"; it's just a guideline. I have a pain threshold of about 3% to 5%, depending on the stock. Now, many traditional direct investment plans have lower fees, or no fees. Therefore, I am keeping my accounts with them instead of moving them to BuyandHold as the site suggests. (I suppose the paperwork might be easier if I consolidated everything, but I don't find tracking my Drips to be a burden anyway.) So, where BuyandHold makes the most sense is with direct investment plans that have high fees ($5 OCPs, for example) and with all the companies that don't offer direct investment plans.

How often can you buy or sell?
Traditional direct investment plans vary widely. My son has a Drip in one company that makes investments quarterly. Others invest once a month, some twice a month, some weekly. Selling stocks can vary by plan, too -- although most of the ones I'm in will sell the day you call them. BuyandHold.com makes transactions twice a day, and does the automatic (electronic) investments on the 10th of the month. The twice-daily transactions are helpful not for trading, but so your money can be invested quickly instead of waiting days, or even weeks, for the purchase date of a traditional direct investment plan. Also, your sales of stock can be done quickly, too (the same day), should you need the funds.

What I like the most about BuyandHold is that my investment account is linked to my checking account. If I want to make a purchase, I can do so immediately and have the money taken directly from my checking. It saves me a lot of time and allows me to put my money to work.

What is the best way to utilize this type of service? I think it is not only to buy stocks that don't have traditional direct investment plans, but also to buy very volatile stocks. I suspect that the extreme ups and downs of stocks like Yahoo! can really work to your advantage with dollar cost averaging. That will be a subject for a future column. Finally, for a comparison of all the new "Drip the Undrippable" plans, check out George Smyth's website.

This past week, Lowe's (NYSE: LOW) and I made contact, so I will call them this week for a follow-up. I'll cover the conversation in next week's column and wrap up the Home Depot (NYSE:HD) vs. Lowe's series.