Saturday, October 12, 2019 12:10:55 PM
Bar1080, Yes, the main beneficiary of zero commissions will be active traders. But in helping them do more trading, they will probably just lose more money, lol.
But on the other hand, zero commissions will help buy/hold investors who use dollar cost averaging, which is one of the better approaches to long term investing. In addition to ETFs you'll be able to buy smaller amounts of individual stocks incrementally month to month.
I mainly just stick with ETFs for the diversification aspect. One potential downside with ETFs is that being derivatives, you don't actually own the stocks directly, you merely own shares of an ETF. You have to wonder what might happen if Blackrock or State Street blow up some day, what will happen to holders of their i-Shares and SPDRs?
I guess there's no way to avoid risk altogether. Even money market funds were a problem during the 2008 crisis, and again with the recent repo market turmoil. I figure having a position in physical gold makes a lot of sense as insurance. This chart speaks volumes (see below). How long before things unravel?
But on the other hand, zero commissions will help buy/hold investors who use dollar cost averaging, which is one of the better approaches to long term investing. In addition to ETFs you'll be able to buy smaller amounts of individual stocks incrementally month to month.
I mainly just stick with ETFs for the diversification aspect. One potential downside with ETFs is that being derivatives, you don't actually own the stocks directly, you merely own shares of an ETF. You have to wonder what might happen if Blackrock or State Street blow up some day, what will happen to holders of their i-Shares and SPDRs?
I guess there's no way to avoid risk altogether. Even money market funds were a problem during the 2008 crisis, and again with the recent repo market turmoil. I figure having a position in physical gold makes a lot of sense as insurance. This chart speaks volumes (see below). How long before things unravel?
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