No. of Recommendations: 1
Woah woah woah... some BAAADD misinformation here, I think.

Those calculations comparing Vanguard to the American funds... are they assuming no expenses beyond the load? That's not true at all. Loaded funds have annual expense ratios as well. In fact, they tend to be higher than non-loaded funds in addition to the load. Not true always, but from my experience it is.

At the very least, it would make it take much longer to break even with the load.

Let's assuming a 0.30% Vanguard expense. Let's give the American fund a very favorable and probably completely inaccurate 0.10%. As a quick back of the envelope calculation, the 0.20% difference will take 28.75 years to make back up.

But, we didn't take into account that you'll also lose 5.75% of your dividends every year if you reinvest them, so that return of a load fund will also be less, all things being equal. Plus, I highly doubt the American funds have a lower expense ratio than the Vanguard ones, at least by very very little. Pick two specific funds and we can compare.

Second, as far as advice, I can't speak for Vanguard, but Fidelity reps will certainly take the time to run some simulations for you and suggest your allocation. PLUS, there's a ton of tools online. PLUS PLUS there are these Motely Fool boards with tons of great advice. PLUS PLUS PLUS the Vanguard Target Retirement of Fidelity Freedom funds do the allocation for you and change it automatically as time goes by.

PLUS PLUS PLUS PLUS, I already suggested a solution for that. If this financial advisor is a friend or someone who's advice you really want, work out a for-fee, not for-commission, deal with him. Sit down with him once a year or an annual review for $100, $200 a year for an hour or two or him time. Don't let him and the fund company take 6% of every dollar you invest or reinvest for years and years.



Really, the only way I'd consider a load fund is if the expense ratios were virtually nothing with them, so that you'd make the money back up in a decade or so of consistent investment. And putting your money in the wrong investment just to get someone's advice seems completely backwards to me. There's a ton of great advice out there anyway, a lot of easy do-it-yourself and automatic-allocation options, and the option for a for-free consultation which doesn't take your money away.
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