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Strategies & Market Trends : Strictly Buy and Sell Set Ups
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To: profile_14 who wrote (5263)8/28/2005 4:43:19 PM
From: chowder   of 13449
 
In my opinion, higher transaction costs on a portfolio with better than 20% annualized returns consistently, is an acceptable cost of doing business.

Where transaction costs adversely affect performance is when you are showing a loss for the year. Your losses are then compounded.

For example, an S&P 500 index fund would be showing a loss for the year, then on top of that you'd have management fees and transaction costs. Not a very pretty picture.

There isn't any perfect set up. If one is to be successful and show consistent profits, then they must have the added cost of doing business in the form of transaction costs and taxes. It's the lesser of two evils. One could always have no gains and thus pay low transaction costs and no taxes.

dabum
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