Investment costs are costs associated with buying, holding and selling investments. They can eat into your returns, so it’s important to be aware of them and factor them into your investment decisions.
There are two main types of capital expenditure:
- Transaction Fee: These are the fees you pay for buying and selling investments, such as commissions, spreads, and ticket charges.
- Administrative Fee: These are the fees you pay investment professionals to manage your portfolio. These may include annual fees, performance fees, and asset-based fees.
Other investment costs may include:
- Account Fees: These are fees charged by brokerage firms for maintaining your investment account.
- Custody Fee: These are fees charged by banks or other institutions for holding your investment assets.
- Investment interest expense: This is the interest you pay on the money you borrow to invest.
Some investment expenses may be tax deductible, so it’s important to keep track of your investment expenses for tax purposes.
Related
