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Commission
Term category: General Investing
In 10 words or less: A fee you pay to a broker in order to buy or sell a stock.

Definition: This is the fee you pay to a broker when you buy or sell a stock. You can often avoid paying high commissions by using online brokers.

StockJargon Advice: We recommend that if you're just investing a small amount of money to find an online broker. Otherwise, the bulk of your money will be spent on paying your broker's commissions.

Also, some brokers are motivated by commissions. This means that they have an extra incentive to get you to frequently buy and sell shares of stock so that they receive higher commissions. This is in their interest, not yours!

Related Articles

The Broker
Before you start investing, you have to find the right broker (online or traditional).

Buy and Sell Orders
There are a few different types of orders you can place when you want to buy or sell a stock.

Diversification vs. Concentration
The argument looms about whether a diversified portfolio is really better than a concentrated one. This article discusses the topic.

Related Books

21 Things I Wish My Broker Had Told Me by Frank Cook
Wall Street Journal Guide to Understanding Money and Investments by Kenneth M. Morris
Investing for Dummies by Eric Tyson
Automatic Millionaire by David Bach

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