Single investment across multiple accounts... good, bad, indifferent?
Are there any implications associated with investing in a single investment across multiple accounts? For instance, investing in 100 shares of Stock XYZ in both my Roth IRA and my Traditional IRA.
From my perspective it's not ideal—I'd rather just invest all 200 shares in one account—but I have limited cash availability and my contributions for 2011 are maxed out.
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One implication is the added fees if you are investing in something with a trading cost or commission, such as your stock purchase.
If you pay low costs to trade (e.g. with a discount broker) and don't switch your investments often, then costs overall should remain reasonable .. but always be aware of your costs and seek to minimize them.
The other issue you could run into is that each deferred account is going to be subject to its own RMD's (Required Minimum Distributions) when you've retired or hit 70.5 years of age. Roth's don't generally care about RMD's at first, but are still subject to them once the person that created the Roth has passed.
Having fewer accounts will simplify the RMD stuff, but that's really only a factor in terms of being forced to sell 'something' in each account in order to make the RMD.
Other than that, it's just a matter of remembering to check each account if you come to a decision that it's time to liquidate holdings in a given security, lest you sell some but forget about the rest of it in another account. (and perhaps as Chris pointed out, maybe having to pay fee's on each account for the sale)
Where this really can come into play is if you choose to load up each individual account with a given kind of investment, instead of spreading them across the accounts. In that case RMD's could force you into selling something that is currently 'down' when you want to hold onto it, because that is your only choice in order to meet RMD's for account X. So if you have multiple accounts, it's a good idea to not 'silo' particular vehicles into a single account, but spread similar ivestments across multiple accounts, so you always have the choice in each account of what to sell in order to meet an RMD.
If you have fewer accounts, it's thus a lot easier to avoid the siloing effect
The main restrictions you see with IRA's involve contributions, and not the actual investments themselves. I would be indifferent to having a single investment across multiple accounts. It might be a bit trickier to manage, especially if your strategy involves some specific asset allocation. Other than account management though, there's no big issue.
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