beware of hidden fees when investing in the stock market

When investing, you may not be able to control how the market performs but one thing you can control are the fees that comes with investing in the stock market.

Over time, the fees will significantly reduce the overall amount of your investment portfolio, otherwise this money would have been available for continued growth.

Beware of the hidden fees below:

• Expense ratios

  Typically, will cost you from 0.2% to no more than 2.5% annually. Expense ratios includes management of the fund, marketing, advertising, and any other costs associated with running the fund. It is charged by mutual funds, index funds and exchange-traded annually.

• Transaction fees

  Typically, will cost you $10 per trade or $50 per trade

  Amount charged per transaction based on buying and selling stocks and bonds.

• Management fees

  The costs charged for hiring a financial advisor. Management fees can also cover expenses involved with managing a portfolio, such as fund operations and administrative costs. The management fee varies but usually ranges anywhere from 0.20% to 2.00%

• Brokerage fees

  Brokerage fees are what a broker charges for various services, like subscriptions for premium research and investing data or additional trading platforms. Choose the right brokerage and you’ll avoid these fees.

  A 2% fee may seem small but can cost you a fortune over time.

  For example, imagine having invested a total of 180k over the course of 30 years (6k per month) assuming 7% annual return will equate to approximately 600k with a 1% fee you will lose approximately 100K and with a 1.5% to 2% fee you will lose between 150k to 180k.

  An expense ratio under 0.2% can be seen as reasonable whereas and anything over 1% would be considered costly over time. Make sure to inquire about those fees before investing as this can deplete the investment amount available to continue to grow.