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By Jason Zweig | Updated Oct. 4, 2019 4:47 pm ET
Freedom isn’t free, and free trades arenât either.
Charles Schwab Corp. shook the brokerage industry this week when it saidÂ it willÂ cut commissions to zeroÂ on Oct. 7. Schwabâs move, which followedÂ a similar cut byÂ Interactive Brokers GroupÂ Inc.Â andÂ has already been matched by rivalsÂ TD Ameritrade HoldingÂ Corp.Â andÂ E*Trade FinancialÂ Corp., is likely to be copied by other big brokers.
You no longer will pay a few bucks in commissions to buy or sell a security at these firms. But Schwab and other brokerage firms are in business to make money, and one way they often do that is by milking clientsâ cash. When you trade for free, you still payâat a different tollbooth.…
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For further reading:
Benjamin Graham, The Intelligent Investor
Jason Zweig,Â The Devilâs Financial Dictionary
Jason Zweig, Your Money and Your Brain
Jason Zweig, The Little Book of Safe Money
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