There are a lot of investment advisors that are not the least bit shy about using unfair tactics for personal gain. When this happens you as an investor end up spending more in brokerage costs and fees than making a profit. They use such tactics as back-end loads, these are expenses that you pay for... what, no one really ever knows. There is no realistic reason for the fees and other added expenses, except to fatten the pockets of the firm or individual you have hired.
A loaded mutual fund simply means that the fund charges you for the shares/units and an additional sales fee. This could easily be from 4-8% of the total investment amount. Some even have a set flat fee no matter how small or large the investment. That is like giving money away.
A no load mutual fund is much easier and cheaper on the investor. You buy, sell or trade your units without paying any fees. Bear in mind that even then some banks and brokers will still charge a fee of some kind for handling a third party mutual fund.
Definition: Back - end loads
These are mutual funds that brokers convince you to participate in that are already burdened by load. Even though they know that the investment will mean little gain for you it serves to get them their commissions and that is what matters most to them. It is up to you to be knowledgeable enough to know when you are being swindled.
One way to stop being drained by your investment advisors is to look for no-load mutual funds on your own. They both offer the same return but with one you must pay a commission fee for just purchasing it. If you are a long-term investor the no-load mutual fund is the best thing you could buy. As long as you do not redeem before at least five years you will avoid the early redemption penalty.
Are all the expenses justified?
When deciding on whether to use a broker or not to use one you must look at the expenses to profit ratio. If the amount you are paying in commission is eating up the profit then of course it is a bad decision. If your return cannot cover a 1.1 or 1.4 ratio for asset expenses then this deal is a sour one. Even if the return is 9.7% over a five year span it may not be worth the headache, especially if it is relation to 2% of your assets. Save yourself from sales fees, management fees and marketing fees by choosing a no-load off the S&P Index. These usually have a 15% return and best of all no fee.
Redemption
Early redemption of course has a fee associated with it but also normal redemption has its fees as well. They are carefully hidden in the well-crafted contracts. You have to be ever vigilant about what you sign. The mutual fund can request of its members a fee based on whether they want to opt out before the allotted time. If the fund is doing well it might be better to remain in it.
It is quite often that we build relationships with our brokers buy never let the nature of the relationship stop you from asking questions. It is your right to know where your money is going and for what purpose. To make your money truly work for you takes two things and they are knowledge and the right platform for trading. You can eliminate the high brokerage cost and fees by taking matters into your own hands.
A loaded mutual fund simply means that the fund charges you for the shares/units and an additional sales fee. This could easily be from 4-8% of the total investment amount. Some even have a set flat fee no matter how small or large the investment. That is like giving money away.
A no load mutual fund is much easier and cheaper on the investor. You buy, sell or trade your units without paying any fees. Bear in mind that even then some banks and brokers will still charge a fee of some kind for handling a third party mutual fund.
Definition: Back - end loads
These are mutual funds that brokers convince you to participate in that are already burdened by load. Even though they know that the investment will mean little gain for you it serves to get them their commissions and that is what matters most to them. It is up to you to be knowledgeable enough to know when you are being swindled.
One way to stop being drained by your investment advisors is to look for no-load mutual funds on your own. They both offer the same return but with one you must pay a commission fee for just purchasing it. If you are a long-term investor the no-load mutual fund is the best thing you could buy. As long as you do not redeem before at least five years you will avoid the early redemption penalty.
Are all the expenses justified?
When deciding on whether to use a broker or not to use one you must look at the expenses to profit ratio. If the amount you are paying in commission is eating up the profit then of course it is a bad decision. If your return cannot cover a 1.1 or 1.4 ratio for asset expenses then this deal is a sour one. Even if the return is 9.7% over a five year span it may not be worth the headache, especially if it is relation to 2% of your assets. Save yourself from sales fees, management fees and marketing fees by choosing a no-load off the S&P Index. These usually have a 15% return and best of all no fee.
Redemption
Early redemption of course has a fee associated with it but also normal redemption has its fees as well. They are carefully hidden in the well-crafted contracts. You have to be ever vigilant about what you sign. The mutual fund can request of its members a fee based on whether they want to opt out before the allotted time. If the fund is doing well it might be better to remain in it.
It is quite often that we build relationships with our brokers buy never let the nature of the relationship stop you from asking questions. It is your right to know where your money is going and for what purpose. To make your money truly work for you takes two things and they are knowledge and the right platform for trading. You can eliminate the high brokerage cost and fees by taking matters into your own hands.
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