Like everything in life, investing comes with a cost.
The point of investing is to make money. But everything has a price—even making money. In the course of investing, you may encounter all sorts of fees. The problem is that these fees are often hidden and difficult to understand. So let’s take a closer look at all the types of fees you see in your investment journey.
Commissions
Commissions essentially are transaction costs paid to the broker or brokerage firm. Although considered a thing of the past, many brokerage firms still charge commissions when you buy a stock, bond, mutual fund, exchange-traded fund (ETF), or other security. These can be expressed as a percentage of the transaction or a flat dollar fee. However, many major firms today charge no commissions, especially when it comes to trading stocks and ETFs.
Some full-service brokerages do charge commissions as they offer more complex and comprehensive services.
