In this segment from Motley Fool Answers, special guest Seth Jayson joins Alison Southwick and Robert Brokamp as they seek out the murky origin of this Foolish rule of thumb: to never let your trading costs exceed 2% of your investment.
But why not a lower limit (or a higher one)? The cast dives into this question as well as the overall importance of managing transaction costs.
A full transcript follows the video.