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I recently went to a financial planner and rolled over my 401k into a regular IRA(IDEX mutual funds). At the same time I started a ROTH ira with Investment company of america. Now, I want to roll over my regular IRA into a roth. However, since I have been researching more on the internet, I find that the load on the Investment company of America is 5.75%.. I dont know if I should put the money from the regular IRA into ICA.
The thing they have going for them is being in business for over 60 years and guaranteed returns.. I dont know what I should do..
Does it sound like Im getting ripped here?? There was a load on IDEX mutual funds as well..

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Ultimately, your comfort with your investment is most important. A load is only a rip-off if you don't believe you are getting something for your money. Remember, your fund has to gain an extra 6% to make up for the load.

If you want longevity, TRowePrice, for example, has probably been in business for as long, and they sponsor no-load mutual funds. Might I suggest their Growth & Income, Equity Income, or Dividend Growth funds? These would be somewhat similar to your Investment Company of America fund.

Zev
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Greetings, tell111, and welcome. You asked:

<<I recently went to a financial planner and rolled over my 401k into a regular IRA(IDEX mutual funds). At the same time I started a ROTH ira with Investment company of america. Now, I want to roll over my regular IRA into a roth. However, since I have been researching more on the internet, I find that the load on the Investment company of America is 5.75%.. I dont know if I should put the money from the regular IRA into ICA.
The thing they have going for them is being in business for over 60 years and guaranteed returns.. I dont know what I should do..
Does it sound like Im getting ripped here?? There was a load on IDEX mutual funds as well.>>


In today's competitive fund world a 5.75% load is unconscionable, unnecessary, and ludicrous. In Fooldom, we believe there's really only one stock fund worthy of your dollars, and that's the low cost, no-load Vanguard 500. Over the long term it will beat the vast majority of stock funds available, and that includes those offered by IDEX and ICA. If you want proof, just go to www.morningstar.com and check out the Vanguard 500 against the funds you're considering.

Regards…Pixy

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tell111:

You are not getting ripped off. You asked a Financial Planner for help and he gave it to you, and the commission is his just pay. You could have chosen a fee-based FA and paid a few thousand dollars for his help, and he would have put you into say Vanguard's no-load index fund. Because you chose a commission-based FA, he gets his few thousand dollars from the 5.75% commission, which is why he won't recommend Vanguard. For instance, if the total amount of your 401k was only $40,000, you only paid $2300 for the advice.

Hopefully it was worth the $2300. If you felt it was, don't complain. If you felt the advice was not worth much, find another FA who is more helpful.

Even better would be to learn to manage your own money so you will not have to pay anyone for advice. I personally would never pay a sales load, because I think I can make decent investment decisions on my own. But many people need to have someone authoritative tell them it is a good idea to invest in an index fund, and of course they have to pay for that hand-holding -- dearly.

If you are fairly sure that the Vanguard Index 500 is a good choice for you, don't go back to that FA.

Bill
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<<< Re: ROTH IRA -Investment company of america
Author: BillEuclid Date: 11/21/98 2:24 AM

tell111:

You are not getting ripped off. You asked a Financial Planner for help and he gave it to you, ...
>>>

It sure sounds as if you were getting ripped, if not off.

If it looks like a pig, eats like a pig, sounds like a pig, and smells like a pig, it just might really be a pig and one ought not to try to make many silk purses out of its ears.

Yes, you should really learn to manage your own money, and that just may be the reason you are on this board in the first place.

Foolishly,

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