Great comments by Kirk Kinder at Swim Upstream to Wealth on a recent Kiplingers article discussing the No Transaction Fee (NTF) platforms of the discount brokerages like Charles Schwab, TD Ameritrade, and Fidelity. Here’s the link to the post. As Kirk points out:
These NTF platforms actually drive up the cost of the funds. Each fund pays the discount brokerage 40 basis points or 0.4% per year to be on the platform. The investor buys the fund because there is no upfront fee, but they pay a higher annual fee.
Seems a bit ironic, no?
Read the whole post here.
Posted by Cale at 8:46 AM in Commentary
Apologies for the delays between posts. Been in the cave on companies lately, among other things. Back in a while to pick up on that CRBC series. In the meantime, here was the most attention grabbing lede I read all week:
“Over the last two years of the housing bubble, Wall Street bankers perpetrated one of the greatest episodes of self-dealing in financial history.”
Great article from ProPublica – “Banks’ Self-Dealing Super-Charged Financial Crisis.” Here it is in its entirety. Also includes these great graphics (click to enlarge).
Posted by Cale at 8:25 AM in Commentary
Two words: “flash crash.”
Good article today in the WSJ about what happened on May 6th.
“…the Dow Jones Industrial Average suffered its biggest, fastest decline ever, and hundreds of stocks momentarily lost nearly all their value. So many things went wrong, so quickly, that regulators haven’t yet pieced together precisely what happened.
A close examination of the market’s rapid-fire unraveling reveals some new details about what unfolded: Stock-price data from the New York Stock Exchange’s electronic-trading arm, Arca, were so slow that at least three other exchanges simply cut it off from trading. Pricing information became so erratic that at one point shares of Apple Inc. traded at nearly $100,000 apiece. And computer-driven trading models used by many big investors, apparently responding to the same market signals, rushed for the exits at the same time.”
I have no idea what any of the above has to do with long-term investing, but it’s going to make one helluva cyborg movie.
Previous posts on High Frequency Trading include this one, and this video. Sadly, there will probably be more posts in the future.
Posted by Cale at 1:10 PM in Commentary
@PhilipEtienne No, will watch for a bit. Here's to hoping for another overblown scare in a few weeks, though. in reply to PhilipEtienne 5 hrs ago
