snocrossmechanic wrote: Not sure about the other responders but I am a financial advisor.
Expense ratios mean nothing. One important thing to understand is there is no such thing as a "no load" fund. Within the 3 types of share classes you have fees. The "no loads" may not have a sales charge but has much higher 12B-1 fees (ongoing mgmt fees for simple explanation). If you intend on keeping a mutual fund for a long period of time then no loads cost you more.
Mark
In my opinion this is terrible advice from a financial advisor.
One of my financial advisors, Bob Brinker, of Bob Brinker's MarkeTimer fame, controverts everything you're trying to spin about no-load mutual funds. I will point out a few: No load funds have it hands down over loaded funds in terms of return, and in terms of sales commissions. Expense ratios do mean everything to a fund. No load funds do not cost you more than loaded funds, especially over long periods of time. For example, if a loaded fund costs 1% a year, that's over 10% in less than 10 years! Any expert in the field would concede this point without trying to spin it to their personal benefit.
It's a shame the sales vultures of Wall Street are like sharks out there, lurking to shark attack for their sales commission, but there you have it.
Please get an advisor. Sometimes it is better to leave your money in the 401k of the employer because they can get the same funds at less cost sometimes it isn't. Also when looking at annuities study what your spouse gets or doesn't get if you pass away.
snocrossmechanic wrote: Not sure about the other responders but I am a financial advisor.
Expense ratios mean nothing. One important thing to understand is there is no such thing as a "no load" fund. Within the 3 types of share classes you have fees. The "no loads" may not have a sales charge but has much higher 12B-1 fees (ongoing mgmt fees for simple explanation). If you intend on keeping a mutual fund for a long period of time then no loads cost you more.
Mark
In my opinion this is terrible advice from a financial advisor.
One of my financial advisors, Bob Brinker, of Bob Brinker's MarkeTimer fame, controverts everything you're trying to spin about no-load mutual funds. I will point out a few: No load funds have it hands down over loaded funds in terms of return, and in terms of sales commissions. Expense ratios do mean everything to a fund. No load funds do not cost you more than loaded funds, especially over long periods of time. For example, if a loaded fund costs 1% a year, that's over 10% in less than 10 years! Any expert in the field would concede this point without trying to spin it to their personal benefit.
It's a shame the sales vultures of Wall Street are like sharks out there, lurking to shark attack for their sales commission, but there you have it.
Anyone that leaves their money in the same fund for 10 years is not balancing their portfolio properly. Where you invest your money depends on market, economic and fund performance conditions. Re-balancing your portfolio is necessary every quarter and therefore you pay more in sales/purchase fees whether they are front or end loads. Get a no load and pay the 12b-1 fees instead.
When talking about expense ratios one must include all loads; front loads, end loads, sales charges and yearly management fees. I've often found that funds with the highest loads have the best performance. In the end the fees mean nothing. It's the performance (ROI) AFTER fees that matters.
* This post was
edited 05/09/08 12:38pm by globemaster9 *
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Skid Row Joe: Since you've dealt with both, I'm wondering why you like Fidelity over Schwab?
I've got about 75% into Fidelity with my present 401k. The remainder is in a Schwab rollover IRA from my last job. (The employer folded about 3 months later, so it was converted from a 401k to a IRA by Schwab since the plan ceased to exist.) I left it behind simply because this was right about the time Enron imploded and I liked the idea of leaving some in an account not controlled by my employer.
"Skid Row Joe: Since you've dealt with both, I'm wondering why you like Fidelity over Schwab?"
Before putting any value on a reply to this question, you would have to assume that the information a total stranger provides might be true. Even the might is a stretch.
The first step for a novice such as the original poster is a financial advisor, period. I would suggest the same for you.
My question about financial advisers has always been, if they are so smart, why are they not sitting under a palm tree with their laptop instead of sitting in a stuffy office being chocked by a necktie and getting their two weeks off like everyone else?
Sea Dog wrote: My question about financial advisers has always been, if they are so smart, why are they not sitting under a palm tree with their laptop instead of sitting in a stuffy office being chocked by a necktie and getting their two weeks off like everyone else?
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