Does anyone know whether load (commission loaded) or no-load (commission free) products better? and Why?
2007-04-21 16:41:55 · 4 answers · asked by Munch_101 1 in Business & Finance ➔ Investing
this actually will depend on how much money you are investing at a time and some simple math. Personally I do not prefer load funds, but a broker can not charge a broker commission on load funds . on a no load fund there will be a brokerage commission, brokerage commissions are usually between $10-80 so if you are investing $100 at a time would you rather pay a load of 3.5% or a $10 commision which would be 10% of your 100. or if you are investing 10,000 would you rather pay a $10 commision or a $350 load
load or no load fund really do not perform better than one or the other so the best way to invest is the way that is the cheapest and most efficient. When looking for a load fund look for a low load fund if you do go with a load fund.
You can actually trade commission free through an online brokerage called zecco.com if you use this site learn to trade exchange traded fund which are like mutual funds but in my opinion better.
2007-04-21 19:18:24 · answer #1 · answered by the man 3 · 0⤊ 0⤋
You also want to know if the commission is paid up front or on sale, and if it is waived if you hold for a minimum time.
Now, let's say you could get a big name firm to manage your money for a 5% commission on every transaction, or your nephew fresh out of high school will do it for free.
Which choice will result in a larger balance after two years?
You can't judge a fund on the commission alone. It's a factor. It's not the only factor.
2007-04-21 23:47:05 · answer #2 · answered by open4one 7 · 0⤊ 0⤋
On the issue of loads only assuming everything else is the same you need to look at total expenses of the fund. I have found that no load funds tend to have higher annual fees which could mean you are better off paying a load upfront for lower annual fees. You need to do the math on this and most importantly know your time horizon.
2007-04-22 01:21:54 · answer #3 · answered by VTXrider 3 · 0⤊ 0⤋
It's pretty hard to beat the market averages. If your broker charges an additional 3 or 4%, that makes it even tougher.
I'd stay away from loaded funds.
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2007-04-22 00:29:05 · answer #4 · answered by SWH 6 · 0⤊ 0⤋