A reader recently informed me that I was wrong about the commission per trade for ETFs at TradeKing. She told me that she’d been buying ETF shares for the last several months and they’d been charging her $14.95 per trade rather than $4.95.
Turns out she was using the wrong ticker symbol.
She thought she was buying Vanguard ETFs (for which TradeKing charges $4.95/trade), but she was actually buying shares of Vanguard index funds (for which TradeKing charges $14.95/trade). For example, she bought Vanguard Total Stock Market Index Fund (VTSMX) rather than Vanguard Total Stock Market ETF (VTI).
End result: She blew through $150 on completely unnecessary commissions. And for her troubles she’s left with the version of each fund that carries higher ongoing annual expenses.
Lesson: Make sure you’re buying what you think you’re buying!
- The ticker for an open-end mutual fund is usually 5 letters, ending with an X.
- The ticker for an ETF is usually 2-4 letters.
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Ouch! Some tickers are pretty confusing. I’ve been looking into buying some fixed interest preference shares here in the UK, and the range of ticker permutations for different issues means you really need to keep your eyes open.
Congratulations on the Plutus award by the way! Very well deserved.
Paying close attention is important….especially when you have money on the line. Ive been known to double and even triple check before I actually hit the button for a purchase…that includes investing, as well as just online shopping, just making sure I fully understand the terms, costs, and associated costs.
In her defense, we have all been there though, and slipped up on something easy. At least she noticed it!
“In her defense, we have all been there though, and slipped up on something easy. “
Oh, absolutely. The whole reason I mentioned it is that it’s a very easy mistake to make, given that the names are so similar.
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