No Load Mutual Funds Explained
What do you do when you want to invest but you no nothing about choosing and investing in stocks or bonds? Simple, you invest in mutual funds. Mutual funds are a way to invest in a wide variety of stocks, bonds, and/or other investments, without having to spend the time or needing the expertise to research.
Mutual funds are pretty easy to understand. Everyone pools their money into a much larger investment. A fund manager does all the research and work to choose investments to invest in that are correctly diversified. They then use the pooled in money to invest in what they chose.
There are different types of mutual funds. Some funds charge fees and others don't. A load fund will charge you a commission fee because they claim to get you a higher return on your investment.
Load funds will normally charge a fee based on the rate of return. If the fund were able to earn a return of 12 percent and they charged 2 percent, you get end up with a total return of 10 percent.
No load mutual funds do not charge you a commission fee. If you earn 10 percent on your investment, you receive 10 percent on your investment. This is what makes no load mutual funds that much more appealing.
You don't necessarily need to go with the load fund. They can't guarantee a higher return, just based on chance. You might be able to get a higher return with a load fund, but if they charge you a fee, it might add up to the same amount or more than the higher return anyway.
If you invest in no load funds, you get the entire return, which can mean more money. If you really think a load fund can earn you more, than go for it. Otherwise, it might just not be worth it.
Don't let the load fund sell you into paying high fees just because they promise a high return and don't go for a load fund just to save a little on fees. Look for a concrete fund with something to offer. - 23200
Mutual funds are pretty easy to understand. Everyone pools their money into a much larger investment. A fund manager does all the research and work to choose investments to invest in that are correctly diversified. They then use the pooled in money to invest in what they chose.
There are different types of mutual funds. Some funds charge fees and others don't. A load fund will charge you a commission fee because they claim to get you a higher return on your investment.
Load funds will normally charge a fee based on the rate of return. If the fund were able to earn a return of 12 percent and they charged 2 percent, you get end up with a total return of 10 percent.
No load mutual funds do not charge you a commission fee. If you earn 10 percent on your investment, you receive 10 percent on your investment. This is what makes no load mutual funds that much more appealing.
You don't necessarily need to go with the load fund. They can't guarantee a higher return, just based on chance. You might be able to get a higher return with a load fund, but if they charge you a fee, it might add up to the same amount or more than the higher return anyway.
If you invest in no load funds, you get the entire return, which can mean more money. If you really think a load fund can earn you more, than go for it. Otherwise, it might just not be worth it.
Don't let the load fund sell you into paying high fees just because they promise a high return and don't go for a load fund just to save a little on fees. Look for a concrete fund with something to offer. - 23200
posted by X - Men @ 1:40 AM
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