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Posted: 1/26/2006 7:35:08 AM EDT
All that I've read and been told about mutual funds is to buy no load funds.
Well I've been plugging different load and no load funds into a fund expense tool. I plug in differnet funds for 20 years at 8% return. I've found that there is not really a big difference in total fees and expenses over about a 20 year period between the two different types of funds. Some of the no load funds actually cost more in the long run. I've heard that load funds are supposed to have a better return but I don't find that's really the case.

I'd like to hear your thoughts.
Link Posted: 1/26/2006 9:39:44 AM EDT
My understanding is, all things being equal, you will pay a load whether or not a fund performs. You will always have good and bad years, so why reward a fund or fund manager who loses money for you. That being said, how about funds that are closed who still charge a 12b1 fee? (It's supposed to be for advertising to draw new clients)

There are some generalizations about funds that may be useful to you. The "A" version of a fund will have a front end load, the "B" version a back end load and the "C" if there is one, will be the least of the three as I recall. It seems many brokers put their clients in the "A" fund for some reason. Hmmm....
Link Posted: 1/27/2006 8:44:59 AM EDT
I have limited knowlege about load funds.I've been w/vanguard since the 80's. They recently started charging what I consider a load because they never used to[pre-2004], .5% deposit and .5% withdrawl of particular index funds plus 10bux a year if your fund is under 10k. You really should consider all the costs.I would also advise you from experiance do not invest w/janus if thats a thought your considering.YMMV
Link Posted: 1/28/2006 1:40:58 PM EDT
Load vs no load isn't just about fees. It is also about advice. You have to be comfortable doing your own asset allocation, performance monitoring (relative to the fund's peer group, etc), rebalancing and so on.
A lot of people are their own worst enemies when it comes to investing. Fidelity has done studies looking at load and no load mutual funds. Fidelity sells both types of funds. The average holding period for the no load funds was 18 months. The average holding period for the loaded funds (sold through advisors) was 4 years. Not surprising the returns for the loaded group was much higher. The outcome of the study showed that the vast majority of do it yourself investors bought and sold at the wrong time. It is very difficult to remove the emotion from your own money. Having an objective 3rd party sometimes help.

If you have the time and experience you can do it yourself. It's up to you. Good luck.

And no I am not a stock broker or financial planner... but I did stay at a Holiday Inn Express
Link Posted: 1/30/2006 7:05:51 PM EDT

Originally Posted By JohnLINY:
Load vs no load isn't just about fees. It is also about advice. You have to be comfortable doing your own asset allocation, performance monitoring (relative to the fund's peer group, etc), rebalancing and so on.
A lot of people are their own worst enemies when it comes to investing. Fidelity has done studies looking at load and no load mutual funds. Fidelity sells both types of funds. The average holding period for the no load funds was 18 months. The average holding period for the loaded funds (sold through advisors) was 4 years. Not surprising the returns for the loaded group was much higher. The outcome of the study showed that the vast majority of do it yourself investors bought and sold at the wrong time. It is very difficult to remove the emotion from your own money. Having an objective 3rd party sometimes help.

If you have the time and experience you can do it yourself. It's up to you. Good luck.

And no I am not a stock broker or financial planner... but I did stay at a Holiday Inn Express



Engineer5 - thats pretty level headed advice and about sums it up pretty well.
If you are unsure enough about what you are doing that you ask for advice from strangers in a gun forum, you might be a candidate for professional advice.
Find possible advisors through referrals from friends, family & peers.
I didn't stay in a Holiday INN Express- but i am in the investment business. Today most of my clients do some themselves and some with me and other advisors- nothing wrong with that.
Link Posted: 1/31/2006 3:18:15 PM EDT
Cohutt,

I already go through an adviser. Just trying to make sure I'm getting both sides of the story. I also do my homework. Sometimes I wonder why he likes certain funds. Do these advisers get any "perks" from the fund companies for pushing certain funds?
Link Posted: 1/31/2006 3:18:53 PM EDT
Cohutt,

I already go through an adviser. Just trying to make sure I'm getting both sides of the story. I also do my homework. Sometimes I wonder why he likes certain funds. Do these advisers get any "perks" from the fund companies for pushing certain funds?
Link Posted: 2/1/2006 4:06:42 PM EDT

Originally Posted By Engineer5:
Cohutt,

I already go through an adviser. Just trying to make sure I'm getting both sides of the story. I also do my homework. Sometimes I wonder why he likes certain funds. Do these advisers get any "perks" from the fund companies for pushing certain funds?



thats understandable and not a bad practice... since just like going to the a doctor, no matter what he advises, you are still reponsible for your own health. same for the money- advisor is a tool for you to use

perks? regulators have effectively cut all of that type of special comp to advisors for one fund over another. all fund expenses to investor are by prospectus, including compensation to advisors and distributors. you have sales charges and you have "trails" which are ongoing service fees paid to advisor out of 12b1 fees. these fees to advisors are lowest on A class shares (.15 to .25% usually) and higher on B and C class shares (add .50 to .75%). (note: .15% = .0015, not .015 or .15... less that 1/4 of 1%. works out to be $15 per year on $10,000, les sthat bank account service fees..most people realize this but for clarity it is worth mentioning- )
for larger purchases the A shares work out much better for long term investors ( due to lower up front charges), the c shares might make sense in some cases, I have no use for B shares (they will go away soon- not a good deal)
what is important is low ongoing expenses- higher annual expenses fees just keep eating away over time, and on a growing pile of money (idealy it grows, right?)


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