USA Today: watch your trading expenses!
Financial media are getting hip to a huge, ongoing shift in our industry: coast to coast, in droves, individual investors and traders are firing their full-service brokers and moving their investments to lower-cost discount brokers like TradeKing. Just this week, both USA Today and Barron’s reported on this mass migration -- one that’s increased our daily trading volume by 114% in Q408 versus Q407.
Why the big shift? Many new DIY investors are clue-ing into what other self-directed traders realized all along: those high-priced advisors, who’d supposedly cushion your nest egg against unprofitable trading decisions, turned out not to be so smart after all. They reduced your investing capital by constantly levying handsome fees, but the vast majority of them did not deliver on the promise of market-beating returns. In fact, most of these investors did much worse than the losses posted by the S&P 500 since last fall – why? Because they lost as much money as an index fund AND lost money in the form of expensive broker’s fees, commissions and management expenses.
If paying through the nose is no guarantee against losing returns, well, why pay through the nose? You might very well do as well investing on your own at a much lower cost.
We applaud this move – in fact, we’re practically cheering in our seats over it, and not just because it’s a trend benefiting our business. I’ve felt for years that most full-priced brokers add very little value while fleecing their clients with fees. Investors may not have noticed so much when times were good, but boy, are our eyes opened to all the good money thrown after bad now.
If you’re a buy-and-hold investor who’d rather not be involved day-to-day in your finances, low-cost mutual funds and smart asset allocation should suit you just fine, at much lower expense than the full-priced brokers. If you’re ready to be more active in managing your money, lower trading commissions and fees help you keep more of the profits you gain through your own efforts, plus a host of educational resources can help you improve your trading and investing knowledge to make more intelligent trades towards your goals. At TradeKing we’re ready and eager to help both these kinds of investors.
Buy-and-holders: check out our Mutual Fund Center with over 8,000 funds available, or our Mutual Fund Screener to find funds just right for you. If you’re at or near retirement, our Fixed Income Center can help you buy bonds, CDs and other fixed-income instruments at much lower cost compared to the full-priced guys.
Active traders: get ready for some serious bang for your $4.95 per trade and 65 cents per options contract. (Compare our pricing now.) We offer a comprehensive roster of trading and research tools, a thriving Trader Network, outstanding trader education, plus we beat the pants off of most brokers for excellent customer service. (Check out the top 5 reasons to open a TradeKing account.) We’re willing to bet you won’t miss Richie Q. Broker IV’s hold times and less-than-stellar advice one bit.
Follow the markets at the TradeKing Blog, learn options strategies from the Options Guy, or check out expert commentary on real client trades at TradeKing All-Stars.
TradeKing provides self-directed investors with discount brokerage services, and does not make recommendations or offer investment, financial, legal or tax advice.
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