At the other end of the spectrum, higher-risk companies can offer even bigger rewards for those who can find the best prospects. If you look at smaller companies' stocks, you can make discoveries early in a company's existence that can result in much higher returns than if you wait until a company is large enough to hit the radar screens of those in the mainstream investment community. Often, the stocks with the highest growth potential won't fit neatly into any one category, but even once the investing public starts to notice them and bids up their shares to what can appear to be extremely expensive levels, choosing the right stocks can leave you with opportunities for future gains.
It’s important to consider transaction costs and fees when choosing your investments. Costs and fees can eat into your returns and reduce your gains. It is vital to know what costs you will be liable for when you purchase, hold, or sell stock. Common transaction costs for stocks include commissions, bid-ask spread, slippage, SEC Section 31 fees [31], and capital gains tax. For funds, costs may include management fees, sales loads, redemption fees, exchange fees, account fees, 12b-1 fees, and operating expenses. [32]
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