Investing
What is the difference between a load and a no-load mutual fund? Why should one be avoided and the other embraced? Where can you go to find the lowest cost options?
What is the difference between a load and a no-load mutual fund? Why should one be avoided and the other embraced? Where can you go to find the lowest cost options?
The “load” refers to a sales commission and it directly impacts how many dollars of a transaction actually go toward your investments. The load is money that you pay to be in relationship with the salesman. As a wise investor, I will seek “no-load” mutual funds to drastically reduce my costs, so that more of my money is put to work for me. Vanguard and Fidelity are good places to look for low cost options.
The “load” refers to the weight of carrying your investment broker’s yacht on your back. But really, it is about maximizing your return and minimizing how much unnecessary money you spend to “maintain” your investments. I just switched some of our “heavy” funds over to Vanguard. The process was simple and the people at Vanguard were incredibly helpful. It actually feels lighter to know that I’ve set down that guy’s yacht (metaphorically of course)!
Well said Erin. Those yachts get mighty heavy as I attempt to proceed forward. Getting rid of that load helps the average investor increase THEIR retirement fund, not the advisors! Keep the comments coming and that includes your approach to explaining the issue.
Outstanding answer Jean! Paying loads are for the uninformed. Go around those salespeople and seek out low cost no load index mutual funds that own stocks and bonds all over the world at the lowest possible cost in your retirement plan at work (401k, 403b, TSP, 457) and a Roth IRA (Vanguard and Fidelity are very good options) whenever possible. Financial freedom to follow!