http://buyingvalue.com/2009/07/proximity-profits-portfolio/ Price is What you Pay Value is What you Get Thu, 11 Mar 2010 15:51:36 -0500 http://wordpress.org/?v=2.8.4 hourly 1 http://buyingvalue.com/2009/07/proximity-profits-portfolio/comment-page-1/#comment-387 Daniel M. Ryan Sat, 18 Jul 2009 18:35:00 +0000 http://buyingvalue.com/?p=649#comment-387 What you wrote makes even more sense given the ultra-low commission rates nowadays. Before discount brokers came along, mutual funds' diversification rationale was more compelling for the following reason: the commission costs on a well-diversified portfolio for an individual account were killers. If each transaction took out 1% in commissions - not unrealistic back in the olden days for a small-to-medium purchase - then buying 20 stocks would incur a 20% transaction charge, not including any odd-lot surcharges. It costs far less to diversify on your own nowadays. What you wrote makes even more sense given the ultra-low commission rates nowadays. Before discount brokers came along, mutual funds’ diversification rationale was more compelling for the following reason: the commission costs on a well-diversified portfolio for an individual account were killers. If each transaction took out 1% in commissions – not unrealistic back in the olden days for a small-to-medium purchase – then buying 20 stocks would incur a 20% transaction charge, not including any odd-lot surcharges. It costs far less to diversify on your own nowadays.

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