Tags: Buffett | stocks | trading | fees

Buffett: Lower Retail Trading Fees Are Biggest Investment Change of Last 25 Years

By    |   Wednesday, 30 Apr 2014 09:34 AM

The most significant development in the investment business during the last quarter century is a reduction in trading fees for individual investors, says legendary investor Warren Buffett, CEO of Berkshire Hathaway.

An investor in stocks pays negligible trading fees for stocks compared with fees for other investment assets, such as real estate, he tells CNBC.

"Commissions are a lot lower than they were 25 years ago. Spreads between the bid and asked [prices] are less. So the investor incurs quite little in the way of transaction costs in investing in stocks."

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But money managers now charge their clients higher fees than in the past, Buffett argues. "If you look at the fees extracted on Wall Street on balance, they've gotten quite substantial compared to 25 years ago."

Meanwhile, Buffett notes that an investor who bought into the S&P 500 index 25 years ago would have done very well. The index has climbed 488 percent during that period.

And someone who buys into the S&P 500 now will do well for the next 25 years, Buffett predicts.

Others are positive on stocks for the short term too.

The bull market may be five years old, but Jonathan Golub, chief U.S. market strategist at RBC Capital Markets, isn't looking for it to end anytime soon.

Seven of the last eight bull markets ended at the beginning of a recession, and the economy isn't close to a downturn, he writes in a commentary obtained by MarketWatch.

The slowness of the economic rebound will prevent the excessive growth that leads to recession, Golub says.

Editor’s Note: Get These 4 Stocks Before 399% Stock Market Rally!

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The most significant development in the investment business during the last quarter century is a reduction in trading fees for individual investors, says legendary investor Warren Buffett, CEO of Berkshire Hathaway.
Buffett, stocks, trading, fees
284
2014-34-30
Wednesday, 30 Apr 2014 09:34 AM
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