AUTOMATIC WEALTH BUILDING WHILE CUTTING INVESTMENT COSTS

I just finished reviewing my investment strategy for my taxable investment portfolio, and came up with an idea to increase my cash holdings, boost the number of shares I own overall and cut costs at the same time.  Sound too good to be true?  On the contrary.  Here's how I did it: 

In my taxable investment portfolio I hold investments in total of 25 dividend paying stocks and funds.  My investment company (ING Sharebuilder) allows free reinvestment of dividends.  So I set 8 of my stocks to reinvest dividends automatically (at no cost) for a total of 56 investments per year, or roughly 4.67 investments per month.  For the remaining 17 stocks in my portfolio, I'm having the dividends paid in cash, for a total of 68 dividend payments per year, or 5.67 dividend payments per month.  Since I'm paying nothing for reinvested dividends, I'll be reducing costs by eliminating commissions on stock purchases altogether.  At the same time, I'm building my cash position by continuing to collect the balance of dividend payments as cash, paid to my money market account.  I'll still have to pay purchase commissions on new investments and commissions on sales, but I should see a significant increase in holdings while also benefiting from greatly reduced costs.  

As a tweak to the system, I'm also reinvesting in stocks which I believe have good long term prospects but are currently selling below my original purchase price.  Reinvesting dividends in these holdings will have the added benefit of reducing cost basis and adding to overall returns in my portfolio.