That would mean that our investor in the example who has $600,000 in her retirement account would only pay $900 a year in fees. While that may seem a little a high, consider how much is being paid, relative to what is received in return.
For less than $1,000 a year and a little bit of research, our investor avoids commissions, receives great asset diversification and bypasses huge management fees. If you think 900 bucks is a lot, consider this: The management fee for a "professionally managed" account runs a little more than 1% of assets for individuals.
Even removing the "little over" part of 1%, we can assume that annual fees for a $600,000 account will cost at least $6,000 per year.
While it is extremely important to do the research associated with picking your own commission-free, low expense ETFs, it can be very rewarding down the road. By taking a look at its past performance, the fund's holdings and a few other key metrics, investors avoid the fees with professional management and the stress of individual stock-picking.-- Written by Bret Kenwell in Petoskey, Mich. Follow @BretKenwell At the time of publication, the author held no position in any stocks mentioned.
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