UnThreaded | Threaded | Whole Thread (12) | Ignore Thread Prev | Next
Author: Goofyhoofy Big funky green star, 20000 posts Top Favorite Fools Top Recommended Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75532  
Subject: Re: high yield dividend funds Date: 1/18/2011 10:00 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
2-3% per year? Nice try. While estimates of averages vary, most funds do not charge 2-3% per year.

Fair enough. I should have said most actively managed funds (you know, the kind the brokers like to sell) charge 2-3% per year. Some are higher. Heck, the Motley Fool fund has a gross fee of 2.30%, although they're subsidizing part of that fee until the end of February to entice people in.

I was thinking of the Morgan Stanley funds, Merrill Lynch funds, and other name funds which have high expense ratios. You can find lower cost funds, particularly index funds, but then you are still giving up return (in return for something: usually diversification and therefore safety.)

(I note your links talk about "expense ratios", but in my experience the fund managers often lard other costs on top of that: marketing fees, commission and so on. And even so-called "no-load" funds start you out with a large back-end load penalty if you withdraw early, so I can't really see how that can reasonably be called "no expense.")

A new study profiled in The Los Angeles Times shows that investors can lose up to half of their contributions to fees when they're in high-cost mutual funds.

Syndicated financial writer Kathy Kristof reports that a self-help portfolio management group called MarketRiders has found the typical investor who puts $4,000 annually into an IRA can lose 54 percent in fees alone each year.

The takeaway here is simple: Don't buy your investments through full-commission brokerage houses or an insurance agent.

http://www.clarkhoward.com/news/personal-finance-credit/inde...
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (12) | Ignore Thread Prev | Next

Announcements

The Retire Early Home Page
Discussion on accelerating retirement day.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement