When times are tough, touch stock investors avoid fees or, at least, keep them to a minimum.
It is seldom a good idea to pay high fees for the privilege of investing.
However, when the market is swimming near the bottom of the pond, high fees can make staying above water a real challenge.
There are some fees you can’t avoid, however you can take steps to dodge the most onerous ones.
How do you keep fees under control?
There are several areas where investors can take control of fees. These include:
- Brokerage fees – Are you still paying full brokerage fees and do you really get what you pay for? Even if you are using a discount broker, you may still be paying more than you need to spend.
Not all broker’s fees are the same and, more importantly, not all brokers offer the same level of service.
Always question the fees charged by your broker. In some cases, really good customers can make a deal on fees.
Is the service (or advice) worth what you pay, if not, do some shopping?
- Financial advisor fees – If you use a financial advisor or planner, are you receiving the quality of service that is truly beneficial?
Financial advisors/planners can be worth the money if they keep you on track and provide a level of service commensurate with their fees. Stringing together boiler plate advice is not worth much is a difficult market and economy.
- Banking fees – Although bank fees are not generally tied to investment accounts, they still take a bite out of your assets. Competition is keen for good customers so do some shopping if you regularly see fees coming out of your bank balance.
- Mutual fund fees – Many investors in individual stocks also invest in mutual funds (to cover the market with an index fund, for example). Virtually every study that has been done suggests that high fees make it very difficult for a mutual fund to show positive growth year-after-year. Look for funds that keep fees low and you’ll have a better chance at a profit.
In a difficult market, it is important to examine every aspect of investing and fees are at the top of the list.
The more you pay in fees, the less chance you have for investing success.
Cut your fees and increase your profits.
