Every type of investment has a cost associated with it and most investors understand this. But how much are your investments costing you? Are the investment’s benefits worth the cost you are paying? How do you know what your investments are costing you every year?
Investment costs can take a number of different forms and some are fully disclosed to investors, while others are not. A few of the investment costs you should understand include:
Your investment costs have a similar impact upon your investment performance as taxation does. The negative impact of investment costs upon your savings increases with the length of time you remain invested. And while investment costs are unavoidable, your goal should be to ensure that your costs are appropriate for the investment and service that you receive. Why pay more than you need to? In our Investment Costs section, we discuss the investment costs associated with each of the following investment types:
We also include a discussion around the following sometimes difficult subject re: investment costs: