FYI: Once upon a time, retail investors paid large entry fees.
In the 1970s, the average stock transaction, as measured by brokerage commission plus half the bid-ask spread, consumed about 1% of an investor’s stake. That percentage began to fall in 1975, when the SEC deregulated commission prices, but it did not disappear. When the 1990s began, for example, the average transaction was 0.50%.
Not so much today. As I write this article, Apple’s (AAPL) bid price is $205.58 and its ask is $205.60. Charles Schwab and Fidelity charge $4.95 per trade. Buying 200 shares through them would cost that $4.95 commission plus two dollars for the stock’s bid-ask spread (0.50 x 200 x $0.02). That makes for a total of $6.95, on a $41,120 purchase--2 basis points. The deregulators’ dream came true, and then some.
Regards,
Ted
https://www.morningstar.com/articles/936342/upfront-investment-fees-are-almost-no-more
