Understanding The Hidden Costs Of Investing

Investing newbies may be shocked by the amount of unexpected fees that siphon away their funds. When you’re searching for a brokerage, it’s wise to investigate hidden costs involved.

MoneySmartLife provides a glossary of several clever ways in which money managers skim a little off the top of your investment. Some examples include:

*Brokerage transaction fees. You pay these on every trade. Some brokers charge flat fees, while others base it on a percentage of the transaction.

Operating expenses. These tend to be higher in actively managed funds, and include distribution fees, which go toward marketing and other costs. Look for the total amount of fees in an expense ratio that explains how much you’ll be paying to invest.

If you invest money, which fees caught you off guard?

6 Investment Costs You Pay to Play [MoneySmartLife]