No individual can avoid paying fees for investing in securities. The basic costs of investing are:
- brokerage fees
High costs of participation will erode investment returns. Potentially high costs include:
- middle manager’s fees (e.g., fund managers, investment advisers)
- subscriptions (e.g., memberships, tool kits)
Tips for minimizing costs
- use a discount brokerage firm that provides accounting services (e.g., cost basis, tax reports)
- enroll in tax-deferred, retirement savings plans
- avoid middle managers. do your own research by starting in the library and using search engines.
- invest in index funds designed to capture the market’s returns
- choose your membership subscription wisely (review the benefits; seek ratings and recommendations, etc.) use trial subscripts first.