1. front end load - fees up front, facing your victimizer
2.back end load - hold onto your ankles, pay when you sell
3.no load - a trick.
No load has you buy in for free, and every year you hold, the fee goes down. and when you sell, if you held for around 5 years, there is no fee. However, if you sell early, you'll have to sell that corvette limo to pay your fees.
It's no wonder that Peter Lynch who operated the magellan fund, earning an average of 30% annually through good times and bad advises people to invest on their own.
He went into Dunkin Donuts, had a good cup of coffee, then bought shares. Women everywhere started buying Hanes Leggs, he noticed and bought the shares. He doesn't make buying a decent stock into some mystical wiccan ceremony. That's why you should buy the book "One Up on Wall Street".
Anyhow, I gotsed to go to the lawyers office.
Mr. Taylor (#2) - Holds his ankles when he buys MF's.
10 comments:
I have to backtrack a bit. My mom called me up and said I need to watch something on the news tonight about the economy. See, they're gonna front for a massive business loan and they don't want me to mess up their cashflow, rightfully so. So she wanted me to see this broadcast. It was about how the USA economy is sucking and everything is 'slowing' (aka, crashing). Sure. But what did they talk about the entire time? Mutual funds and RRSPs. Guess what's crashing hard and not looking bright? You bet. Our buddy the MF. At least those folk can sell and get out of dodge if they need to...or...maybe they can't!
I truly didn't know about what T2 said about the 'pay later' option. Gimme a break! What fruit nut would pay later? Man. These people are marketing wizards. They sit down in their board room and say:
"Gentlemen and ladies. How can we get these financially illiterate average people to hand over more cash to us? I mean we got them suckered into 'investing' in our RRSPs which they can't escape from, but they don't seem to be buying or buying enough of our MF's. For the record, team, it's not their fault that they suck at investing. Their school system doesn't even teach them where their local bank is...but I digress... Hmm. It seems to be that the service fees that we're taking for 'processing their investment'. I guess they see it as paying for nothing, maybe. They are right, but, hey. I'm not willing to give that fee up, are you? Didn't think so. So..hey! I just got it! Have you noticed how people tend to use those credit card things? They'll shop till they drop! They'll travel to Timbuktoo! And they don't even have money to pay for it. Because...they pay later. So, let's tell them that if they pay later for our MFs they can 'get in for free'. If they say, a few months in, "I want out" we'll say 'Sorry. You've signed an agreement that says you get penalized for trying to escape. After all, we want to be in the driver's seat, boy, so sit down, shut up, suck up your losses and tow the line."
How was that dramatized version? I just got a bit heated when I also heard that my dad has a wack of $$ tied up in RRSPs. I could buy real-estate with that and build some kind of empire. Meanwhile we may have to sit and watch it evaporate if we follow the US stock market.
Boo.
We need to publish a BLIP reading list. I've got some to share too.
MF's don't have to go down with the market. But you need a manager with a hairy back to make that fly, someone who's tasted the good and the bad.
A good one will know what to buy that goes up contrary to the market, like wheat. I read about wheat last summer, made some money on a wheat pool, and watched commodity prices rise all year.
Funny you mention wheat. I was just about to post about gold. Today's investing lesson from Master Song (That sounds cooler than Mister Song) was about gold. Look for that on an upcoming post.
Good to hear that poop doesn't necessarily have to hit the MF fan.
I'll eat more Wheaties for you, T2.
If you like mutual funds, you might like Exchange traded funds (ETF's) even more, as the fees are generally lower and they are apparently a little lighter on the tax bill too.
heard some more here..
http://www.moolanomy.com/36/protect-your-wealth-with-exchange-traded-funds/
Thanks Rayban. That was seriously useful and relevant. Is it possible that someone has fixed a bad thing? I think T2 is going to like reading that link. Vanguard.. Hmm.
I just hate the mental picture of T2 holding his ankles, so I had to find a low cost alternative for everyones peace of mind.
What, are you calling me fat?
No. I am, fatty.
meet me at the flagpole when the markets close, then we'll find out who's fat.
No need. The answer is 'yo mamma'. And besides, if you are a true Taylor (like me) you couldn't fight your way out of a wet paper bag. That's why we have to do investing - to make sure we can hire some homeboys to fight for us.
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