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.
How does a mutual fund work? First, anyone who invests in the fund pools their money together. Then, a fund manager takes the money and invests it into all different investments that they have researched carefully. The fund manager does all the research and diversification work for you.
You can choose basically two different kinds of mutual funds, load and no load funds. Load funds will charge you a fee. You can earn a higher return on your money and that is why you are charged a fee.
They usually charge a fee as a commission percentage of what you earn. For example, they might charge you 2 percent. If you earn 10 percent on your investment, they will subtract 2 percent so you end up with an 8 percent return.
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.
Should you choose load mutual funds because they give you a higher return? They can't guarantee you will get a higher return. It is all up to chance. You might end up getting a lower return, even before the fee. It is entirely possible. The fee might even just cancel out the higher return.
With no load funds, because you don't have to pay a fee, all the money the investment returns goes to you. You can get every last bit out of your investment because you aren't paying any commission fees.
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. - 23159
How does a mutual fund work? First, anyone who invests in the fund pools their money together. Then, a fund manager takes the money and invests it into all different investments that they have researched carefully. The fund manager does all the research and diversification work for you.
You can choose basically two different kinds of mutual funds, load and no load funds. Load funds will charge you a fee. You can earn a higher return on your money and that is why you are charged a fee.
They usually charge a fee as a commission percentage of what you earn. For example, they might charge you 2 percent. If you earn 10 percent on your investment, they will subtract 2 percent so you end up with an 8 percent return.
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.
Should you choose load mutual funds because they give you a higher return? They can't guarantee you will get a higher return. It is all up to chance. You might end up getting a lower return, even before the fee. It is entirely possible. The fee might even just cancel out the higher return.
With no load funds, because you don't have to pay a fee, all the money the investment returns goes to you. You can get every last bit out of your investment because you aren't paying any commission fees.
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. - 23159
About the Author:
When looking for mutual funds, choose the best fund and don't worry about investing in no load mutual funds vs load mutual funds.
posted by X - Men @ 2:22 AM
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