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How Savvy Investors Are Reducing Portfolio Expenses

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Modern investors are constantly looking for the best ways to reduce expenses on their portfolios. Investment portfolios incur fees for a number of reasons. Traditionally, portfolio fees were viewed as a necessary cost for investing. However, many modern social trading platforms offer low or zero-fee investment options. When properly practiced, these options can substantially reduce your fees and maximize your overall returns. The quicker you begin practicing expense minimization strategies, the sooner you can begin collecting larger returns. If you are interested in how to optimize your portfolio and reduce fees, read on to learn about how other investors are reducing portfolio expenses.

Be Aware Of Fund Expenses

In order to reduce investment expenses across your portfolio, ensure you are aware of all the fees your portfolio incurs. The funds you purchase and companies you buy stock in greatly impact the fees you will have to pay. Many traders frequently pay so much in fees simply because they are unaware of their portfolio expenses. Before selecting any investment, it is essential to adequately research all the fees it requires. Many funds incur a sales load or commission if they are purchased through a broker.

This can either be in the form of a front-end or back-end load. Some funds additionally require surrender fees if shares are sold prior to a specified date. Furthermore, depending on the platform you choose, you may even have to pay a transaction fee. In some cases, these fees can be as high as $20 to $50 whenever an investment is traded.

Invest On Social Trading Platforms

Social Trading platforms are an excellent way for investors to reduce portfolio expenses. Social platforms offer a diverse array of investment tools to help traders reduce expenses and maximize returns. Most platforms offer a series of investment strategies that model the methodology of experienced investors. At the same time, they link traders with a social profile consisting of news feed, market stats, investor portfolios, and charts for investment yields.

These features help traders like yourself consistently monitor the stability of your investments and reduce management fees. Some of the best social trading platforms even offer stocks without broker commissions, administration, management, or ticketing fees. For investors looking to expand and diversify their financial portfolio while simultaneously reducing expenses, consider trading on social platforms.

Hire A Financial Advisor

Consider hiring a financial advisor in order to reduce your overall portfolio expenses. Financial advice fees are a major component of your total portfolio expenses. Some advisors charge upwards of 1% for portfolio management and financial advice. However, in many cases, investment advisors only offer reasonable fees to significantly larger investment portfolios.

In order to reduce expenses, consider finding an advisor that does not operate on a percentage-based scale. Many certified financial planners charge reasonable hourly or flat fees for their services. With this, you can only request financial services when you are in need of assistance. Otherwise, you are being charged an annual retainer for potentially infrequent advice.

Take Advantage Of Automated Technology

Take advantage of reliable, automated tools in order to reduce your overall portfolio expenses. Some of the largest expenses your portfolio incurs are that of management, financial advice, and account maintenance fees. Historically, these fees were accepted as part of trading securities. However, modern platforms offer automated tools that can assist in these responsibilities.

Automated technology deploys a number of robo-investing and robo-advisory tools to secure your investments. These systems offer computer-driven services to manage your portfolio, ensure investment stability, and recommend profitable instruments. Compared to traditional brokers, the fees required by automated tools are considerably lower, allowing you to expand your portfolio while simultaneously reducing expenses.

Consider Different Investment Types

In order to reduce your portfolio expenses, consider the different investment types. Each financial instrument has a unique set of fees, management expenses, and tax requirements. Be sure to research the best financial securities for your capital investment. Options like stock trading, online investing, or crypto-trading have fees completely different than other financial instruments. In order to balance taxes and management expenses, consider indexed-funds like ETFs or mutual funds.

If you are unsure about which investment types to select, consider social trading platforms. These platforms act as a one-stop shop for various investment types and financial tools. Consider selecting various investment types in order to reduce your overall investment portfolio expenses.

There are several ways for modern traders to reduce their overall portfolio expenses. The first step in reducing your portfolio fees is to remain aware of your fund expenses. Consider investing on social trading platform to reduce your total fees considerably. Take advantage of automated technology for your investing whenever possible. In addition, consider selecting different types of financial securities for your portfolio. Furthermore, consider hiring an hourly or flat-feed financial advisor. Consider the points above to learn about the essential ways for investors to reduce portfolio expenses.

For more great Savingadvice articles on investing, consider these:

What You Need to Know About FANG Stocks

Great Marijuana Stocks To Invest In Now

Is It Too Late To Invest In Cannabis?

Is the Stock Market Open on Good Friday and Easter?

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is the stock market open on good friday
Anyone active in the stock market knows how important it is to know when the stock market opens and closes. If you think the market is closed when it is actually open, missing a day when the stock market is active could make a huge difference in your investment portfolio. When a holiday like Easter rolls around, it can get confusing. Although Easter is not a federal holiday, many people celebrate the holiday, which means a lot of establishments choose to close. Since it has its own schedule, you might wonder if the stock market is open on Good Friday, Easter, or both.

Is the Stock Market Open on Good Friday and Easter?

 

The “stock market” often refers to the New York Stock Exchange (NYSE) and the NASDAQ. Usually, it observes most federal holidays (like banks) and a few holidays that are not federal. However, there are some federal holidays it does not observe and some non-federal holidays, like Easter, that it does. The bond market (SIMFA) doesn’t follow the same schedule. So, if you are a trader or have money on the market, you may be wondering if it will be open on Good Friday, April 10 or Sunday, April 12 (Easter) this year.

Is the New York Stock Exchange Open on Good Friday?

The stock market is not open on Good Friday in observance of the Easter holiday. It is also closed on Easter — the stock market is generally closed on Sundays, so it isn’t a change from the normal schedule. There will be no selling or trading on Friday, April 10. You can, however, buy, sell, and trade on Thursday, April 9 and the market will reopen for regular hours on Monday, April 13.

Is NASDAQ Open on Good Friday?

NASDAQ will not be open on Friday, April 10. Because the NYSE and the NASDAQ run on the same holiday schedule, the NASDAQ will also be closed on Good Friday just like the NYSE. However, just like the NYSE, you will be able to access services on Thursday, April 9 and Easter Monday.

Will the Bond Market Be Open on Good Friday?

The bond market will be closed on Good Friday. The bond market, also known as the SIMFA, will be closed on Good Friday, April 10. If you have any business to tend to with bonds, you’ll need to take care of it Thursday or make sure it can wait until Monday.

The stock market (NYSE and NASDAQ) closes in observance of the following federal holidays:

  • New Year’s Day
  • Martin Luther King Jr. Day
  • Washington’s Birthday
  • Good Friday
  • Memorial Day
  • Independence Day
  • Labor Day
  • Thanksgiving
  • Christmas Day

The stock market also closes early the day before Independence Day, the day after Thanksgiving, and Christmas Eve. It is also important to note that the NASDAQ follows the same schedule as the New York Stock Exchange. The closing times are in Eastern Standard Time (EST).

If you are an active trader or have holdings in the NASDAQ, NYSE, or bond market, you should become aware of what days these markets are open and closed. Often, the stock market does not always follow a federal holiday schedule, the market’s schedule is slightly altered.

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Photo: Flickr: Rob Ireton

Three Tips for Students Looking to Invest

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Many of us think about investment as a pipeline dream. Something that’s not achievable for the average student. The stereotype of an investor is someone who is rich, 60 years+ and someone who is better informed than the rest of us when it comes to making their money grow. But this is an outdated idea, and really, there is no better time to start capitalizing on the market than when you are at college. If the idea of investing interests you and you want to make a head start on your journey to achieving financial security, there are a few things to consider.

Do Your Research

Many successful stockholders will tell you that the most important aspect of successful investing is research. As we’ll discuss below, risk is a major factor in protecting yourself, and a solid understanding of the market is crucial to reducing that risk. You can make smaller investments as a way of learning and testing the market and different strategies. To start out, you can buy penny stocks, which typically cost less than $5 per share. Find a penny stocks list online and explore the options that are listed. With small stakes, you can risk a small about of money and learn invaluable information about premarket data, aftermarket prices and market movers.

Learn About Risk & Risk Management

But before you begin to hunt around for the best places to put your money, it is worth thinking about what kind of investor you will be. Some investments can be highly lucrative but often come with high risk factors. There are also those that will earn you a more moderate income with less risk attached. Learning about the different types of risk is key if you want to be successful. Liquidity, inflation, horizon, credit, market and concentration risk are just some of the areas you’ll have to explore. You must also think about the different levels of risk; do you know the difference between mild, moderate, elevated, severe and extreme risk? If not, it’s essential that you educate yourself on the factors that distinguish one from the next.

Diversity Is Fundamental

One way to limit your risk is to diversify your portfolio. Not sure what a diversified portfolio is and why it is so fundamental? A combination of various assets that earn the highest return for the least risk, a diversified portfolio normally features a mix of fixed income, stocks and commodities. Having this kind of diversification is important because assets react differently to shifts in the market and, because your assets won’t correlate with each other, you’ll minimize your overall risk.

Getting some professional insight into diversification and how it could help you to maximize your ROI is a smart move. You’ll get to know more about low-risk CDs (certification of deposits), S&P 500 index funds, penny stocks and opening an IRA. Remember, you’re still in college and putting the time in now to learn about the market and how to invest could be the differentiating factor in your success as an investor once you graduate.

Should I Invest In High Dividend Blue Chip Stocks In 2020? Your Questions Answered

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You may have heard about blue-chip stocks if you’ve been researching investment tips. However, you might not be too sure what they actually are, or why they’re so special. Here, we’ll take a closer look at what blue-chip companies actually are and why they’re such a strong investment choice so you can decide for yourself whether 2020 will be the year when you invest in these stocks.  [Read more…] about Should I Invest In High Dividend Blue Chip Stocks In 2020? Your Questions Answered

Here’s What You Should Know Before Investing In Penny Stocks

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before investing in penny stocks

Many investors, including aspiring ones, find penny stocks enticing. The possibility for massive gains is there, allowing you to turn a little bit of cash into a substantial windfall. However, in exchange for that potential comes a ton of risk. Penny stocks are highly volatile, so they aren’t ideal for those with a weak stomach or no tolerance for risk. If you are considering making the leap into penny stocks, here’s what you need to know before you invest.

What Are Penny Stocks?

A stock doesn’t have to cost an actual penny to be considered a penny stock. Instead, depending on how you ask, anything under $5 or $10 a share may qualify. Additionally, the stocks could be on standard listings, like the New York Stock Exchange (NYSE) or NASDAQ. However, that isn’t overly common. Usually, you’ll find them outside of the big markets, such as over-the-counter exchanges.

Just because a penny stock has a low price or isn’t on the NYSE or NASDAQ, that doesn’t automatically make it a bad investment. However, they are usually cheaper for a reason. The company could be struggling, the industry may be new, or demand for the product or service may be questionable. That doesn’t mean it can’t be a success, just that there is a clear barrier, obstacle, or concern impacting the value equation.

The Appeal (and Flaw) of Penny Stocks

The reason penny stocks are attractive is the price point and the profit potential. For example, if you find a stock at $0.50 a share, if it hits a $1, you’ve doubled your money. That makes them seem like good bets.

To many, that seems like a fairly small jump. After all, large companies can see their stock prices swing way more than that in a day, and no one bats an eye.

However, that change represents a 100 percent return. That’s actually massive. The company’s prospects need to shift significantly to generate the required level of interest to spur a price increase of that magnitude.

While it is possible for that to happen, it’s important to understand what that gain actually means. Otherwise, your expectations may not be in line with reality.

Scams Do Exist in the Penny Stock Market

Since most penny stocks are on over-the-counter exchanges, they don’t have to meet the same requirements as those on the NYSE or NASDAQ. Reporting their financials might not be required, and key company information can be missing. As a result, you have the possibility of running into scams.

Both the “pump and dump” and “short and distort” fraud techniques are easier to play out with penny stocks. This is especially true since many penny stock investment decisions are emotionally instead of logical, particularly since information about the companies tends to be limited.

Tips for Investing in Penny Stocks

If you do decide to invest in penny stocks, make sure you use a smart approach. Research the companies thoroughly. Specifically, look for financial filings or statements and, if you don’t find them, consider that a red flag.

Additionally, it’s smart to diversify. Make sure you have some sound, long-term investments in place before you drive into penny stocks. That way, you have some money in lower-risk options, too.

Be vigilant about surcharges. Some brokers charge fees for low-priced stocks or if you trade above a certain number of shares. But there are also options that don’t have surcharges or volume restrictions, so you might want to find one before you hop into the world of penny stocks.

 

What do you think people should know before investing in penny stocks for the first time? Share them in the comments below.

 

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