| |
| |
|
|
Stocks & Mutual Funds Information |
|
|
|
Expense Ratios
Mutual funds and brokers are always preaching not to buy any fund with a high expense ratio. That is the annual costs of the fund to pay for trading of stocks within their portfolio, salaries, rent, telephone, analysts, etc. Most of them tell you not to buy one that exceeds 1.5%. There is also another expense added by some mutual funds called a 12b1 (usually from ¼% to 1%) that is supposed to be used for promotional purposes only. These numbers may appear small, but they are being applied to multi-millions, sometimes billions of dollars. The 12b1 is for advertising of the fund to bring in more investors. The more customers, the more money in the fund, spreads expenses over a greater amount of money and should reduce the expense ratio. We have seen allegations recently that many funds are putting the 12b1 in the pockets of the fund managers and even as the fund gets larger and larger the expense fees have not been reduced. I won't be discussing here the loads (commissions) charged as I see no reason to buy any fund that charges commissions; there are thousands of no-load (no commission) funds that outperform the load funds. For example, here are 2 funds. The first is Pioneer Fund which incidentally has a commission charge of 5.75% with a price per share increase of 22% in 2003 and an expense ratio of 1.11%. Another fund Yacktman Focus Fund with no commission charge and a return of 27% with an expense ratio of 1.25%. Five percent better return is a huge difference. Which one would you buy? The Merrill Lynch Global Technology Fund with a back end load of 4% and an expense ratio of 2.78% yielded 52% so far this year. Another no-load fund, Profunds BioTechnlogy, with an expense ration of 2.92% and has made 56% YTD. Another no-brainer as to which one you wished you had bought earlier this year. Just a couple of more: Enterprise Growth Fund with a commission of 4.75%, an expense of 1.73% and a return of 20% YTD and Rydex Energy Fund a no load with expenses of 1.39% and a return of 23% YTD. Even if you leave out the commission charges you will easily find funds that have returns in excess of those with lower expense ratios. Don't be fooled by Wall Street nonsense of anything but net total return on your money. Period. If you take into account the additional commissions that many funds and brokerage companies charge you will quickly see you have been hoodwinked all these years. The above examples are not extreme as I don't think expense ratios should mean anything to influence your purchase. Don't let any broker or financial planner sell you anything other than the best return for your money. Al Thomas' book, "If It Doesn't Go Up, Don't Buy It!" has helped thousands of people make money and keep their profits with his simple 2-step method. Read the first chapter at http://www.mutualfundmagic.com and discover why he's the man that Wall Street does not want you to know. Copyright 2005
MORE RESOURCES:
Stocks-Mutual-Funds - Google News |
|
|
|
RELATED ARTICLES
Outsourcing It's about time someone spoke the truth concerning outsourcing. The politicians sure won't. The Cub; II We keep hearing about this bear market and that the bottom is "in" or "very close" so we should be invested in these bargain basement prices to take advantage of the next bull so we won't lose out on the expected huge profits.This is not a big bear market - yet. Gurgle Gurgle Caught in a whirlpool and being sucked under. No life vest or other device to save you. No Load Mutual Funds: Boost Your Portfolios Returns Investors who exclusively use broadly diversified, no load mutual funds for their stock investments often lose out on opportunities to increase the reward potential of their portfolios. This article looks at two methods investors may use to enhance the performance of their portfolio of diversifed, no load mutual funds. So, What is This Stock Market Thing Anyway? We've all heard of the stock market and probably have a general idea of what it is and how it works either from high school economics classes, television financial reports, and the countless film depictions of what happens on the floor of the New York Stock Exchange. But how does it really work and what is meant by "playing the stock market?"The Stock Market in a NutshellCompanies sell shares of stock as a means of raising capital. Long Term Investing In his wonderful book, 'Multiple Streams of Income', best selling author Robert Allen advises Investors to divide their Stock Market investment and trading capital into three portions -50% invested long term (forever) in an Index Fund, 30% invested in Accelerated Stock strategies and 20% in options or high risk investment strategies.This article will discuss long term investing and how technical analysis can alert us to points in time when it is prudent to take profits and exit the Stock market. Why Buy and Hold? Since I can remember, and that's a long time ago, the Wall Street brokerage companies, mavens and mutual fund managers have been exhorting the mantra of Buy and Hold for all your investments. There have been erudite studies published that this is the only way to go. Trade Stocks for Real I read a comment by a forum member on another site earlier today that suggested that every investor should back test their system for at least twenty years. I disagree and will now tell you why. Your Job There are so many kinds of work that needs to be done and you are doing one of those jobs right now - unless you are one of those two and a half million that have been laid off during the past 3 years. The press continues to blame China and India for stealing away all these forms of employment, but they don't have it right. Alfred E. Newman What! Me worry?Many of you remember the cover of MAD magazine. It was one of my favorites. Advantages and Disadvantages of Mutual Funds Outlined below are some of the advantages and disadvantages of mutual funds. Every investment has advantages and disadvantages. A Stock Market Investment Strategy I feel that an investment strategy in the stock market can instill in the individual investor not only an assured confidence in all future stock market investments, but also an almost Zen-like sense of peace and well being. A stock market investment strategy spelled out, proven, and instilling within the investor the power to succeed in the stock market with an assured confidence. The Shadow The Shadow knows. There used to be a radio program called The Shadow where the hero, Lamont Cranston, the Shadow, would overcome the shadowy forces of doom by clouding the vision of those around him. Patterns The Law of Chaos is the theory of random unpredictable action applied to the cosmos, mathematics, mechanics, almost everything. Those who believe it will definitely think the stock market is in chaotic state at this time. Psychology - How to Reduce Negative Thoughts Relating to Trading? The thinking process of the brain relating to the psychology of trading involves:-- Beliefs -- Feelings -- Values -- Dispositions and -- FaithThe positive or negative energy brings power to a person's actions, which ultimately determines whether a person is a winner or a loser. You can change for the better or for the worst. Bollinger Bands Strategies The Bollinger Band theory is designed to depict the volatility of a stock. It is quite simple, being composed of a simple moving average, and its upper and lower "bands" that are 2 standard deviations away. Box Of Chocolates Ever have one of those sample boxes of candy? Each little piece is beautifully wrapped in colorful foil or decorated with an interesting design. Taste just one. Good News? As the man said, "I've got some good news and I've got some bad news. What do you want to hear first?" It was replied, "Tell me the good news first". How (NOT) to Buy Mutual Funds When it comes to mutual funds, there is a lot more to success than just finding a good one. Sad investment stories like the following are all too common. The Next Bull Market We are already in it, but you can't see it. It doesn't look like the one we had in '99.
|
| home | site map |
| © 2006 |