Understand the Costs of Doing Business with an Investment Strategy

Beware of the costs of using an investment strategy

If you are considering using an investment strategy to build capital for retirement or to help build up a fund for emergencies or another financial goal like a down payment on a Chicago new home, it is important to first understand your costs of doing business. While it’s true that not all investments are guaranteed to be rewarding, and many, in fact, are quite risky, there usually are some costs to be aware of in addition to market volatility. The Equifax Finance Blog explores these in the article "Breaking Down Investment Fees and Commissions."

• A typical fee for investing is the transaction fee, which happens every time your investment company buys or sells stocks, bonds, mutual funds and just about anything else. This cost depends largely upon the brokerage fee you use to conduct your business, and can vary from nothing to as much as $50 per transaction. Be sure to inquire about this fee when you sign up with a brokerage, as some have interesting rules about what causes a fee and what does not.
• Sales commissions are another cost you should expect to incur if you are using mutual funds and other types of controlled financial investments. The sales commission is a one-time charge that is over and above the management fees charged by the mutual fund and rewards the salesperson. These range from five to nine percent.

There are many other potential fees, charges and commission costs you may incur as you save for retirement or another savings based fund. Be sure to check in with the Equifax Finance Blog for helpful information about saving money with investments, real estate, college and more!