LPS5,
As always, you have a wealth of information, I'm not surprised to learn that great effort has gone into breaking down these costs, nor surprised to find that the "fuzzy" numbers comprise the bulk of transaction costs for the big players.
Second, that it is worthy of note that in both cases, the commissions/fees/markups were the smallest part of the transaction cost. This is nearly always the case on the institutional side; on the retail side, of course, the brokerage costs are the major, and at times the only, costs above and beyond the principal cost.
As for the retail investor, I'm not sure the fuzzy numbers are all that less significant compared to the big players. I well remember the first few investments I made with a broker, assuming he would try to get me a good price, and later finding I had gotten about the worst price of the day. As do-it-yourselfers, we of course all try to optimize our entries and exits to gain from the intraday fluctuations of the market, but in those moments when we want to pull the trigger I think for most of us missed trades and slippage far outweigh what we are paying in commissions and fees. If we could aggregate all the retail trades and run the numbers, I don't think we would fare any better than the big investors, and might not even be doing as well.
Thanks for the input. Very instructive.
Dan |
