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Money

Zero Commissions Doesn’t Always Mean Totally Free Trades

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Watch your currency conversion fees when buying US stocks outside the US market

When you focus on buying international stocks, you most likely start by looking for the platform that provides access to as many asset classes as possible, and with the widest range of options to choose from so that you may find the best possible investments for your strategy.

Another important factor to consider are the fees charged by the broker. Some brokers charge high fees, which can eat into your investment returns, while others shout about their zero-commission trade offers.

But when you see zero commission trading, you may want to consider whether zero commission actually means the implied free trading – or whether there are other fees lurking that make that proposition a bit more costly to your overall stock purchase. This is especially a concern with currency conversion fees for buying a US stock from anywhere outside the US market.

For non-US investors, the cost of investing in US stocks also includes fees for exchanging foreign currencies into USD to buy or sell those shares. This fee can make a big difference in the total cost of your stock purchase or sale, so it’s important to know how much each broker charges for currency conversion.

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“International investors seeking exposure to U.S. stocks for portfolio diversification should be aware that zero commissions on U.S. stock trading as advertised by some brokers is anything but free,” said Steve Sanders, EVP of Marketing & Product Development at Interactive Brokers. “When FX conversion and other fees are factored into final transaction costs, select brokers charge significantly more than Interactive Brokers. Interactive Brokers offers investors the ability to trade U.S. stocks at some of the lowest costs in the industry without the added hassle of opening multiple brokerage accounts.”

Therefore, it becomes imperative to know how much each broker charges. And since the main goal of any investor is the highest-possible return, any money lost in relation to this can hurt a person’s overall return on investment.

Interactive Brokers keeps this fee low, with the currency conversion fee being as low as $2.00 or 0.02%, depending upon your market and your stock purchase. If you dive into other brokers’ fee structure, you may find their currency conversion fees can be a multiple of what IB charges. A recent chart published on Interactive Brokers site showed how several “zero commission” brokers were getting away with currency conversion fees between 5x and 10X those of IBKR’s minimal fee. All non-US investors should check their region’s IBKR site to see the potential savings according to their market.

It is important to find a broker that charges low fees so you can keep more of your investment returns. Interactive Brokers keeps currency conversion fees consistently low. In fact, fees at IBKR attend to be among the lowest in the industry, if not the lowest.

What makes the financial institution even more attractive on this front is their integrated account, where investors can have their capital in multiple currencies. This means investors can exchange money when they want to – and are ready – to buy shares or invest in an array of financial instruments.

Adding to this compelling argument is that IBKR also don’t charge for inactivity on the account. This means that an investor can sit on the sidelines for as long as required, waiting for THAT perfect opportunity to arise.

Nor does it require a minimum deposit when opening an account.

And with over 30 years of experience, Interactive Brokers has the experience and resources to help you grow your portfolio.

Interactive Brokers is the perfect choice for investors who are looking to take control of their finances and grow their portfolio. With low fees and a wide range of investment options, Interactive Brokers can help you reach your financial goals.

Get started today by opening an account here.

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Money

RBA cuts cash rate, easing pressure on homeowners

RBA cuts cash rate from 4.35% to 4.10%, marking first reduction since November 2020, benefiting struggling homeowners.

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RBA cuts cash rate from 4.35% to 4.10%, marking first reduction since November 2020, benefiting struggling homeowners.

In Short

The Reserve Bank of Australia has reduced the official cash rate from 4.35% to 4.10%, marking its first cut since November 2020 due to declining inflation. Homeowners are set to benefit, but experts warn the effects may take time to be felt.

Homeowners have awaited this decision more than a year, hoping for financial relief. The RBA stated that declining inflation justified this cut, indicating that it is beginning its rate-cutting cycle.

Due to falling inflation metrics, the Board expressed confidence that inflation rates are moving towards the target range of 2-3%. They noted that underlying inflation was recorded at 3.2% in the December quarter, suggesting pressures are easing faster than anticipated.

However, the Board also cautioned about potential upside risks, especially with recent strong labour market data, leading to uncertainties in economic activity and inflation outlooks.

Further cuts

Despite the rate reduction, the Board remains cautious about further cuts. They highlighted the need for careful assessment of inflation data, consumption growth, and global economic conditions before making new policy decisions.

Mortgage holders will benefit from the cut, with potential savings estimated at over $1,000 annually.

Market expectations indicated a high likelihood of this reduction, with forecasts suggesting more cuts in 2025 and early 2026.

Economic experts warn that it typically takes time for the impacts of rate cuts to fully materialise in the economy, suggesting homeowners may experience delayed benefits.

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Money

Interest rates impact investments, housing, and economy

Interest Rate Cuts: Implications for Borrowing, Housing Prices, and Australia’s Economy Post-COVID

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“Interest Rate Cuts: Implications for Borrowing, Housing Prices, and Australia’s Economy Post-COVID”

In Short

Interest rates in the US and Australia are under scrutiny as the impact of COVID-19 fades, raising concerns about investments and borrowing capacity. Experts are debating the long-term effects of Australia’s recent rate cut on housing prices and the cost of living crisis.

This development raises questions about its implications for investments, repayments, and savings.

To discuss these issues, we have Andrew Woodward from the Investor’s Way.

The rate cut has raised concerns about its impact on Australians’ borrowing capacity and the potential for rising housing prices.

There is also speculation about how this rate cut could affect the ongoing cost of living crisis in Australia. Experts are considering the possible long-term consequences of this reduction on Australia’s economy.

Many are asking whether this signals the start of a series of rate cuts by the Reserve Bank of Australia.

It’s important to examine how this shift in Australia’s monetary policy aligns with broader global economic trends.

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Money

Hainan’s hidden paradise is transforming the global economy

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Once a quiet island, now a booming gateway—how Hainan is becoming a powerhouse of trade, innovation, and opportunity

The Big Picture unveils the incredible story behind China’s newest economic powerhouse. Host Mark Llewellyn explores a tropical island that has been transformed into a thriving hub for Australian and international businesses. As part of the Fortune Bay economic zone, this region is poised to drive China’s economy—and global growth—over the next decade. With ambitious plans in place, the opportunities for innovative and successful Australian businesses could be immense.

In this episode, discover China’s best-kept secret, where the rapidly evolving, visa-free, and largely tax-free island of Hainan is unveiled to the world for the first time. With its booming economy and vast untapped potential, Hainan presents a golden opportunity for Australian businesses looking to break into the world’s largest market. Journey through breathtaking landscapes, meet visionary leaders, and explore bold innovations shaping this emerging economic powerhouse—one poised to drive global growth for the next decade.

 

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