What is loaded/no-loaded index funds?

Question

Which one should I choose to invest my $500 or $600? and where?

Answer 1

go for the no-load

"load" refers to a sort of TAX they charge you, to figure out what stocks to buy for you

maybe 1 to 3%

get the no load ones

maybe an index fund, like S+P 500, or Nasdaq

one that doesn't require thinking to invest the money

from what I have heard those do much better than when they try to choose good stocks

I would suggest finding one that has done well for like 10 years already, look for at least a 12% return, no load, for like 10 years

Answer 2

Disclaimer; I am not a stockbroker and I am not authorized to give advice. This is my personal opinion.

Any mutual fund, including index funds, are "loaded" if there is a charge just for buying or selling shares of the fund. This charge is separate from the cost of managing the fund, which all shareholders pay anually on a per share basis.

A load is a commission paid to the broker or the fund and is usually expressed as a percent; loads If the charge is made when you buy, it is called "front loaded." If it's when you sell, it is called "back loaded." The arguement for charging a load is that it is a one time charge favors serious long term investors and discourages people who jump in and out of funds. Funds with loads claim that the stability provided by the load enables the fund managers to more easily look for long term profits.

For investing in an index fund, you should definately choose a "no-load" fund. An index fund is designed to mimic, as closely as possible, a specific basket of funds, such as the "Dow Jones" or "S & P 500" The index fund does not make investment decisions. It buys and sells stocks and/or bonds (depending on the type of index) mechanically so that the fund always is the same as the index it is matching. Index funds get their investment power from low costs, not expertise, so it is unwise to pay a commission, or "load" for an index fund.

Answer 3

You are doing the right thing by investing in an Index fund. Index funds beat 80% of all actively managed funds over a 20-year period. They have low fees and good tax treatment and you don't have to watch them all of the time.

Open a Roth IRA with Vanguard and invest in their Index fund. It has a very low expense ratio and no load, which means very low fees. Fees cut into your investing performance, which means both your money doesn't compound as fast and you have less money to compound.

By opening a Roth, all your gains are tax-free, and if you ever need to you can withdraw your original $500 penalty-free, you just can't withdraw the earnings until retirement. You can also withdraw money from your Roth to buy a house without taking a penalty, although I think you do pay taxes on the earnings in this case.

Answer 4

loaded fund charges you a % fee either to buy or sell the fund. no-loaded fund does not charge any explicit fee. All the expenses are hidden in the bid/ask price of the fund.
With the amount you're investing, definitely go for the no-loaded fund that gives you more bang for the buck.

Answer 5

You want no load
A "load" is a sales fee, up to 10% of the amount invested, charged when buying (front load) or when Selling (back end load or Deferred load).

Mutual fund companies usually charge loads in some fashion.
Banks usually do not.

Answer 6

You probably want to put your money in a certificate of deposit for a few months while you research investing. Many of the index funds have minimum deposit requirements of around $1000. It is my understanding, that TIAA-CREF has one that the min. is only $100. Have a look at the sites below.

Check bankrate for a cd until you figure out where to invest.

Answer 7

A load fund is one that charges a fee to get in ("front end load") or to take your money out (back end load). A no-load fund doesn't have these.