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Hi! I,m new to using the internet as well as to investing,
and am finding the whole experience exciting so far.
I do feel that I have put the horse before the cart, by trusting
my bank's broker to set up my IRA account for me. I now know
what "load" means. Is there any advantage to having a load fund?

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"Is there any advantage to having a load fund?"


Not unless you like paying someone for nothing. I would look at www.vanguard.com or www.janus.com

Don't pay the load
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Hello rusticinvestor:
I do feel that I have put the horse before the cart, by trusting
my bank's broker to set up my IRA account for me.


Could be. I agree with the general consensus here that believes that if you want a CD in an IRA, then go to a bank. If you want to invest in stocks, do it through a broker (A discount broker if you're knowledgeable enough), and if mutual funds are your choice, find a fund company you trust and is inexpensive and open the IRA with them. Cut out the middle man.

Is there any advantage to having a load fund?

Sure, for the broker who sold it to you. He'll get a bit extra for putting you in a load fund. Don't you feel lucky? If you want to investigate certain mutual funds, try this site http://www.fundalarm.com . I agree mostly with the view shared by the authors at the following links:
http://www.fundadvice.com/FEhtml/InvestingBasics/9504(b).htm
http://www.bloomberg.com/personal/archives/ft_A9707_cheap.html

Here's a quote from the Bloomberg article:
Fund expenses make a difference-a huge difference- in your bottom line investment return. In fact, according to a new study by Bloomberg Personal, low-cost funds are much more likely to deliver above-average performance than high-cost ones

This conclusion can be drawn based on several other studies as well. The majority of empirical research shows no performance difference between load and no-load mutual fund performance...In general, given a risk-adjusted basis by investment category, no-load funds performed better than load funds Kuhler & Pope (2000). Drums & Walker (1994 & 1996) concluded that there is no reward for paying a load fee when investing in mutual funds. And Investors are not rewarded for paying the higher fee of a load fund - Volkman & Wohar (1995).

Take the Foolish advice, beware the load, for it usually turns out to be worth a load of $#*@. ;-)

HTH

Bookm

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If you have a problem with the link to FundAdvice.com in the prior message try http://www.fundadvice.com/FEhtml/InvestingBasics/9504%28b%29.htm Good article!
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Thanks CABob for the help on that link. Someone on another board did the same thing to fix the link, and I just noticed it and was going to post the correction here right before you did.

Thanks again,

Bookm
-Still wondering what a hexidecimal is ;-)
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Is there any advantage to having a load fund?

Maybe. If you are receiving valuable investment advice and handholding, it may be worth the load. But if you are doing your own fund selection and can get by without continued hand-holding (and many people find they actually do better without the handholding once they get some knowledge of investing under their belt), the loads end up being pocketed without adding value, so it is then better to not pay for a service you aren't receiving.

The other time one may consider a load is when there is no no-load equivalent of that fund.

Personally, I make use of an investment professional because I don't trust myself with bear markets, but I know that I am getting less money actually invested in exchange for her advice and help. But I am probably in the minority here on fool.com. Actually, I have a foot in each camp: my regular (taxable) investments are in load funds through her, but my 403(b) investments are through TIAA-CREF, which is a no-load, low-expense investment organization and provides almost no hand-holding.
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<Is there any advantage to having a load fund?>

For your broker?---Yes!

For you?---No!

Sam (Been there--Done that)
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