While many people are nervous about investing, the reality is that it doesn\u2019t have to be complicated or expensive. In fact, if you can keep your investing plan relatively simple, it\u2019s possible for you to invest at a fairly low cost.<\/p>\n
Low-cost investing is important because it allows you to keep more of your money. When you invest at a low cost, most of what you make remains with you \u2013 rather than leaking away to pay fees. If you want to save money as you invest, here are 3 ways to do so:<\/p>\n
Rather than using an in-person broker, get involved with DIY investing online. An online discount broker can offer you low commissions, including flat commissions. You pay a flat fee when you trade, meaning you pay your small fee and you don\u2019t have to worry about someone taking a cut of your portfolio year after year.<\/p>\n
Many discount brokerages will let you trade for between $4.95 and $6.95 per transaction. That\u2019s not bad. There are even some with lower commissions, but many beginning traders might not get the support they need at such sites.<\/p>\n
Look for an online discount broker that doesn\u2019t charge annual fees or account maintenance fees. Look for a broker that doesn\u2019t have a minimum requirement, and that has a low (or no) opening requirement. With many discount brokerages, it\u2019s possible to open an account quickly, and begin investing relatively soon.<\/p>\n
Rather than trading frequently (which can cost you as transaction fees add up), consider investing in low-cost funds that you don\u2019t need to trade very often. Investing in individual stocks can get tricky, since you have to be able to identify a good deal and then hope that it doesn\u2019t lose a lot of value.<\/p>\n
Funds, on the other hand, follow the performances of a group of assets. That means if one asset struggles, you are instantly diversified so that your entire portfolio isn\u2019t brought down.<\/p>\n
There are funds that are expensive, though. Actively traded mutual funds might have a variety of fees, and expense ratios can cut into your returns. Choose index funds and ETFs that have low expense ratios. You will pay a percentage of your holdings each year, but you can usually find funds that charge 0.25 percent or less.<\/p>\n
Choose a few funds that meet your asset allocation needs, and then invest in them over time. No need for active trading.<\/p>\n