Investment Expenses

Investment expenses are the 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 investment expenses:

• Transaction fees: These are the fees you pay to buy and sell investments, such as commissions, spreads, and ticket charges.
• Management fees: These are the fees you pay to investment professionals to manage your portfolio. These can include annual fees, performance fees, and asset-based fees.

Other investment expenses can include:

• Account fees: These are fees charged by brokerage firms for maintaining your investment account.
• Custody fees: These are fees charged by banks or other institutions for holding your investment assets.
• Investment interest expense: This is the interest you pay on money borrowed to invest.

Some investment expenses may be tax-deductible, so it’s important to keep track of your investment expenses for tax purposes.