|
Author: Al Thomas Article source: http://www.mutualfundmagic.com/. Used with author's permission.
You have heard about a particular mutual
fund from a friend, saw it advertised on TV or read
about it in some publication thought it would be
a good buy. Next you call your broker to get his
advice before you buy because he is an expert
and is there to help you make money.
"Hello, Billy Sol (see Billy Sol Estes on
Google), this is Joe Mushroom and I want to buy
some XYZ mutual fund. What do you think?"
"Joe, I was just thinking about you and was
going to call you, but first let me look up XYZ
for you. Uh oh! Joe it has a high expense ratio
of about 1 ½ per cent. I would not recommend
that for you."
Billy Sol fails to mention that XYZ has
no load (that's commission) so he would not make
any money if you bought it. There are thousands of
excellent no-load funds that outperform the load
funds. Billy Sol says the fund his brokerage
company recommends is ABC and again fails to
mention it has a 5% load (commission) and goes
on to paint a beautiful picture of ABC and how
well it has done in the past 5 and 10 year
period. Furthermore the expense ratio is only
one per cent which is savings of 33%.
WOW! Joe thinks that sounds pretty good so
he lets Bill Sol buy ABC instead of XYZ. Let's see
what really happened.
Joe saves ½ percent per year on the expense
ratio, but pays and extra 5% up front. Maybe I'm
wrong, but if you divide ½% in 5% that goes 10
time. In other words it is going to take Joe
Mushroom 10 years to makeup that 5% commission
charge not counting what that 5% charge would
have made if it had been working in Joe's
account for that 10 year period.
What it boils down to is never pay commission
for any mutual fund. If the broker will not sell
you a no-load fund then get another broker. He
is not trying to help you make money. He is
trying to make money for himself and his company
and may tell you his company does not carry a
particular fund because they don't think it is a
good. Hog wash. Another broker lie. It is your
money and you are entitled to buy any fund. Go
to a discount broker who handles that fund and
open an account. It will save you a bundle over
the years and they are as safe an any big-name
broker.
Advice from a financial planner is no better if
he is making commissions. The smart method is to
have a fee based broker who has a winning track
record. Have any financial planner show you his
model account. He should have one or maybe
several model portfolios. Unless they make money
every year he is not a successful money advisor.
Don't let them hoodwink you about their
performance "is better than the S&P500". That's
nonsense. You want to see a cash increase every
year.
The first and basic rule is never pay
commissions for any mutual fund. 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
The Oldies? Nostalgia? Watchyacallit?
Our culture is defined by what we have access to! With the concentration of media the access as been restricted to the newest tunes...
Getting More Minerals From Your Fruits and Vegetables
Fruits and vegetables are your lifeline. Discover 4 ways that you can use to get the most minerals out of the fruits and vegetables you eat. Minerals help to ...
Do the Robot!
Sometimes, to get ahead of the game, you have to think AS the game. Don't try to outthink the search engines, try to think with them. Before you know, you'll ra...
Buying House Plans Online
House plans are available for a vast range of property types, so whether you live alone and want your own private little home, or whether you have a large famil...
8 Steps for Getting Free Traffic to Your Website
Want to Make Free Money on the Internet? One of the biggest problems with starting an Online Business is getting traffic to your website. One of the easiest way...
Local Search Optimization - A Guide to Getting Started
Learn exactly what local search is, and how can you best position your business to take advantage of it. Discover how you can optimize your online local search ...
Is that W-A-L-R-U-S?
We all speak the same language, don't we? Then why is it that there can be misunderstandings? This article addresses the nature of language and how anyone can...
Free Music Downloads
Free music downloads? Does such a thing actually exist?
Adirondack Furniture - What It is and Why You Want It
Adirondack is the name given to a style of furnishings that date back to the late 1800's. During this time period, immediately following the civil war, upstate ...
So You Want To Have A Website
Businesses of today need an internet presence to show they are legitimate - tomorrow businesses will need internet presence to survive. With a website the worl...
Tempest in a Tea Cup, Wisdom in a Sake Cup
What an oxymoron the Physicians Committee for Responsible Medicine has turned out to be. This vegan organization has one colossal ax to grind with their archriv...
Kids and Medication Part II
In continuation of mood enhancement drugs for kids and adolescents, we next discuss the issues of Prozac. Of course there is the other favorite drug Prozac whic...
Attack Smaller Searches To Get The Big Ones!
Searching online can not only be fun, but you sometimes need to be downright inventive. For those of you who have been searching online for years now, you've pr...
Protecting Your Children On The Internet
How safe are your children while on the Internet? Do you have rules and guidelines they must follow. Read this article and see why protecting your children on t...
When your Dog is an Escape Artist
What options do you have when your dog is an escape artist? Here are a few.
Why You Should Learn HTML
Do you have a website or are you planning on creating a website in the near future? You owe it to yourself to at least learn some basic HTML (HyperText Mark-up ...
Beware of Thimerosal
You need to know what Thimerosal is and how to avoid it for your health's sake.
Help from a Digital Lab Photo Printing Professional
Why not learn from a pro?
Save Body Sway for the Dance Floor, Not Your Golf Swing
Body sway is a consistency killer in your golf swing. Learn how to get rid of body sway in your golf swing. Hit the ball straighter, more accurately, and more c...
Generate Traffic And Make Money
Websites with rotating ads offer their members to surf for cash and advertisement credits. The article provides background information about this quite new phen...
Laying Out Your New Landscape
When planning your new landscape, the first place to start is by driving around your neighborhood and seeing what other people have done with their landscapes. ...
Business Continuity Testing Starts with the Risks
All business continuity plans need to mirror the business and be based on the risks to that business. This article looks at options for dealing with risks in b...
Military Loan and Military Loans
Military loans are made available to active servicemen and retirees and are one of the great benefits to those who have served their country.
All You Really Want Is Feeling Good
We all strive for certain things, success, money, wealth or loving relationships. Yet, whatever we strive for are almost all the time means to an end. What we r...
|
Print this page