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Rekenthaler Report

When Free Isn’t Free

The investment industry doesn’t often give something for nothing.

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No Commissions!
Travelers quickly learn to avoid “no-commission” currency exchanges that lurk outside of baggage claim areas. With the rates they charge, they could pay their customers a commission and still turn a profit. (My favorite horror story: A German tourist swapped EUR 300 to a freelance trader, for what he was told was the equivalent sum of Mongolian tugrik. He received EUR 3 worth.)

Mainstream investing is considerably cleaner. The waters are murky indeed for options traders, or those who buy penny stocks. Nor would I steer my favorite relatives toward cryptocurrencies. However, for investors who stick to the center of the road, brand-name brokerage firms, mutual funds, and banks offer far better deals than do those currency exchanges.

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John Rekenthaler does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.