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Pastimes : Clown-Free Zone... sorry, no clowns allowed
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To: maceng2 who wrote (170714)6/6/2002 1:37:16 PM
From: Knighty Tin  Read Replies (1) of 436258
 
PB, I used to always wonder the same thing about brokers and commissions. If everyone is selling stocks, shouldn't they make out like madmen? The answer is no, for several reasons: 1. The banking side delivers most of the profits. You don't have many IPOs during a bear market. The supply is there, but the demand isn't. 2. Commissions on selling $10,000 stock are less than buying $20,000 stock. So, price inflation helps the absolute level of commish. 3. Firms are moving to fees on assets. Assets are declining. Fees decline. 4. Most firms have big mutual fund and other management subs. None of those subs have funds that take advantage of a bear market. 5. Firms make more on "packaged" products than on exchange traded securities. Nobody wants another repackaging of an index at a high fee during a bear market. 6. Overhead goes up. 7. Individual brokers who are producing can hold up the fund for more payout. I am being fitted for my mask right now. <VBG>
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