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The Swarm Lounge
General Investing and Economics Discussion - No Politics
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<blockquote data-quote="LibertyTurns" data-source="post: 721668" data-attributes="member: 789"><p>People get gouged by hidden expenses. Taxes, transaction costs are common items. There’s other ways of having money leech out the back door for example:</p><p></p><p>You might want to look at how your brokerage performs. When you buy & sell, how does the sale actually execute? You hit the buy button & the current spread is sell at $11.50 and buy at $11.46. You hit the button with a buy limit of $11.50. Blocks of sales occur and if you look carefully maybe you’re closing at $11.49 with your poor performing brokerage while a better brokerage is closing at $11.48 or $11.47. On the face of it 2 cents looks like a pimple on a gnat’s butt, but with 1k shares that’s $20. Trade 50 times a year with equal buys and sells, 1 trade a week/ 2 transactions and you’re out $2k.</p><p></p><p>If you’re an ETF bubba, you got discounts and premiums to account for in addition to expense ratios. If you’re frequently trading ETF you’ve got spread ratios that can kick your butt. Passive funds usually have really low expense ratios so on $100k you may only pay $200. More actively managed accounts may be .75% so you’re paying $750/year or $60/month just for them to manage your money. International funds or stocks have other expenses typically.</p><p></p><p>It makes a difference.</p></blockquote><p></p>
[QUOTE="LibertyTurns, post: 721668, member: 789"] People get gouged by hidden expenses. Taxes, transaction costs are common items. There’s other ways of having money leech out the back door for example: You might want to look at how your brokerage performs. When you buy & sell, how does the sale actually execute? You hit the buy button & the current spread is sell at $11.50 and buy at $11.46. You hit the button with a buy limit of $11.50. Blocks of sales occur and if you look carefully maybe you’re closing at $11.49 with your poor performing brokerage while a better brokerage is closing at $11.48 or $11.47. On the face of it 2 cents looks like a pimple on a gnat’s butt, but with 1k shares that’s $20. Trade 50 times a year with equal buys and sells, 1 trade a week/ 2 transactions and you’re out $2k. If you’re an ETF bubba, you got discounts and premiums to account for in addition to expense ratios. If you’re frequently trading ETF you’ve got spread ratios that can kick your butt. Passive funds usually have really low expense ratios so on $100k you may only pay $200. More actively managed accounts may be .75% so you’re paying $750/year or $60/month just for them to manage your money. International funds or stocks have other expenses typically. It makes a difference. [/QUOTE]
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General Investing and Economics Discussion - No Politics
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