No one ever said the price of ignorance was low. By not being aware or not paying close attention, the broker has been having a field day with grandmas funds. She also probably agreed to it, whether she realizes it or not. She has probably paid front loads, back loads, 12b-1 fees, high annual expense fees, etc. In this scenario, the brokerage firm, the broker and the mutual fund ALL make their money (guaranteed). IF there is anything left over, she will get it. Her pockets are being picked with each transaction. I wonder if they are also charging her a management fee (percentage of assets managed) for their "services". For someone who cannot or does not want to spend a lot of time or energy on their investments, the Vanguard S&P 500 index is an easy route. No loads, front or back, no 12b-1 fees, an annual expense ratio of less than 0.2%, no financial management fees, reduced taxes because of less transactions. You can follow your holdings very easily in the index summaries of your daily newspaper. BTW, 80-90% of actively managed funds FAIL to beat the S&P 500. If you want to hear the experience of someone actually using the S&P index for the long term, ask for some input from CHIPS.BRG (it's always good to read a post from Chips, regardless of the subject)
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