mini home additions niles ht floors and remodel lincolnshire adding 2nd floor to ranch house add a second floor to my house rolling meadows best finished basements .. Chicago Drug testing

Expense Ratios

Mutual funds and brokers are always preaching not to buy any fund with a high expense ratio. That is the annual costs of the fund to pay for trading of stocks within their portfolio, salaries, rent, telephone, analysts, etc. Most of them tell you not to buy one that exceeds 1.5%. There is also another expense added by some mutual funds called a 12b1 (usually from ?% to 1%) that is supposed to be used for promotional purposes only. These numbers may appear small, but they are being applied to multi-millions, sometimes billions of dollars.

The 12b1 is for advertising of the fund to bring in more investors. The more customers, the more money in the fund, spreads expenses over a greater amount of money and should reduce the expense ratio.

We have seen allegations recently that many funds are putting the 12b1 in the pockets of the fund managers and even as the fund gets larger and larger the expense fees have not been reduced.

I won't be discussing here the loads (commissions) charged as I see no reason to buy any fund that charges commissions; there are thousands of no-load (no commission) funds that outperform the load funds.

For example, here are 2 funds. The first is Pioneer Fund which incidentally has a commission charge of 5.75% with a price per share increase of 22% in 2003 and an expense ratio of 1.11%. Another fund Yacktman Focus Fund with no commission charge and a return of 27% with an expense ratio of 1.25%. Five percent better return is a huge difference. Which one would you buy?

The Merrill Lynch Global Technology Fund with a back end load of 4% and an expense ratio of 2.78% yielded 52% so far this year. Another no-load fund, Profunds BioTechnlogy, with an expense ration of 2.92% and has made 56% YTD. Another no-brainer as to which one you wished you had bought earlier this year. Just a couple of more: Enterprise Growth Fund with a commission of 4.75%, an expense of 1.73% and a return of 20% YTD and Rydex Energy Fund a no load with expenses of 1.39% and a return of 23% YTD.

Even if you leave out the commission charges you will easily find funds that have returns in excess of those with lower expense ratios. Don't be fooled by Wall Street nonsense of anything but net total return on your money. Period. If you take into account the additional commissions that many funds and brokerage companies charge you will quickly see you have been hoodwinked all these years.

The above examples are not extreme as I don't think expense ratios should mean anything to influence your purchase. Don't let any broker or financial planner sell you anything other than the best return for your money.

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

In The News:

Historical Briefing: Stocks, Finance and Money

The World Bank claims that some two billion of the... Read More

Mr. Market

I constantly hear the talking heads on CNBC-TV, the radio... Read More

Invest, Be Wrong, and Make Money in the Stock Market

I have been trading for several decades and was an... Read More

Lies, Damn Lies and Mutual Fund Returns

How many times has this happened to you? You're at... Read More

Money, Insanity and Wall Street

Money: the most charged word in the planet. It means... Read More

Is the Stock Market for You?

Many people would like to diversify their portfolios to expand... Read More

Does Japan Matter?

For the last 12 years we have seen the Japanese... Read More

Stuff

I continually hear from economists, talking heads, other market letter... Read More

Your Job

There are so many kinds of work that needs to... Read More

Wall Street Paradigm

In 1960 an engineer working for a watch company in... Read More

Understanding the Bulls and the Bears

If you've ever flipped on the television to CNN Financial... Read More

The Holy Grail (of Investment)

Every year I go to the Money Show in Orlando,... Read More

Low Tide

When you stand on the ocean shore and watch the... Read More

Its A Duck

If it walks like a duck, quacks like a duck... Read More

China Syndrome

There has been great condemnation recently because China has been... Read More

Wal-Mart: Discount Store, Discounted Stock?

As GuruFocus updates the stock buys and sells of gurus,... Read More

Stock Market Volatility

In my opinion, due to the volatility of stock market... Read More

Hedge Funds

You read and hear a lot about hedge funds. Unfortunately,... Read More

What is the Most Important Indicator of All?

Most stock market traders have a favorite technical indicator.The one... Read More

Investing Basics - Stocks, Mutual Funds, Real Estate & Online Investing

Have you ever thought of investing? Do you have a... Read More

What is Involved in Peak Performance Trading?

There is so much involved in developing peak performance, that... Read More

How Much Money Can I Make With Trading? What Account Size Do I Need To Start?

What account size do I need?How much money can I... Read More

Which Way The Market

I am hearing predictions by brokers, financial planners, talk show... Read More

Online Investing & Stock & Share Trading: 4 Reasons Why Most Online Investors & Traders Go Broke

Are you attracted to the idea of being in control... Read More

What is a Mutual Fund?

Ever wondered what is a mutual fund? A mutual fund... Read More

energy efficient lighting led led retrofit kit Pete's produce ..
energy efficient lighting led led retrofit kit Pete's produce ..