February 1st, 2013
In the world of investing, what is a load? How can you avoid paying a load? Example?
In the world of investing, what is a load? How can you avoid paying a load? Example?
Load or commission is a fee charged when a financial product is purchased or sold. This is typically pure profit for people who sell financial products and is in addition to other fees like management or transfer fees This money buys the big yachts for Chuck Schwab and others.
There are no load financial products available like mutual funds that don’t have fees for merely buying and selling a product. You can choose between products that charge extra fees and those that don’t. Why would you pay someone to make money on your investment?
A load is a fee or commission that you pay to a broker when you invest. They invest your money in stocks, bonds or whatever gets them the highest commission. Conflict of interest. You should invest your money in no-load mutual funds in a place like Vanguard. They charge no or very low fees depending on the amount you invest.
A load is a commission, you can avoid paying a load by managing your own portfolio. If you have accounts through vanguard you won’t pay a commission like you would going through a broker
Great job, everyone. Aaron was first and he nailed it. Paying a load to invest your money is unnecessary and wasteful. I don’t have much to add to the three comments. Nice job, you three.