Mortgage Blog

If I tell you that the trading cost for the property is more than 5% or 6%, do you agree? Here is my explanation:

If you purchase a property for 500k, and sell it for 700k. Your profits are 200k. And the agent commission is 5% of the sale price, which is 35k. Then for the 200k, you paid 35k, and your cost is 17.5%. Is it right?

And that's why we normally we do not buy/sell the property too often. Better to keep it longer.

Similar thing for trading stocks. If you purchase the stock for $100, then sell for $120. Then purchase for $120, sell $140. And buy $140, sell $160. Your profits are so different from buy at $100 and sell at $160. Every time, we sold the investment, we will pay the tax on the capital gain, either short term or long term. One thing you might argue is that we are much smarter than the market. I can buy $100 then sell at $120. Then buy back at $110, sell at $130. etc. I know I am not that smart. I used to trade MA at $100. I made around 15k, but I lost those trading shares since I purchased at $100, and sold at $120, and when it was $130, I thought the stock was too expensive. Then I could not "brave" enough to buy them back. And MA is $318 today.