Learn The Stock Market And How to Trade

So what exactly is a load vs no load mutual fund?  A load fund is essentially a sales commission for the advisor or broker who found the mutual fund for you.  There are either charged front end (sales commission), back end (out of profits) or level loaded (a percentage of the purchase every year.)  The no load mutual funds don’t charge you any commission because the money is made internally in the running of the fund.  Most research shows that there is no real difference in return on investments between no load funds and load funds as a whole, however if you don’t know how to pick you a good mutual fund then the sales commission may be cheap compared to picking a poor performer. 

Why does any of this matter if you are one of the hot shot stock market traders reading this blog?  Well these mutual funds are helmed by some brillant stock market minds with the full resources of multi-billion dollar portfolios.  Beat that with your free google searches!  While they may not make the best returns they have the ability to move large amounts of money.  Something that gets hard to do when your trading from your laptop.  So if you’re doing well and you can’t manage to trade every dollar you have, moving some of your retirment money to a no load mutual fund may be a smart move to lower the risk of your overall portfolio. 

Best No Load Mutual Funds

Picking your top no load mutual funds is most easily whittled down by first choosing why you’re picking the fund.  I tend to pick funds in areas where I’m either bad or have no interest in managing my own investments.  Therefore my mutual fund choices tend to focus on foreign investments.  Now I have a whole team of experts watching over seas while I focus on what I like doing.  For you it may be boring blue chips or income investment, just use these mutual funds to round out your choices.  The next thing you do to whittle down list is look at their past performance, I like to pick ones with more than 10 years history.  Don’t forget to look at their expense ratios (fees) since earning 3% per year more than the competition means nothing if they charge 4% a year more.  Finally I read the prospectus to make sure their views fall mainly in line with mine becaue I don’t like yelling at my statements every quarter when they go against my grain.

Related posts:

1. ETF’s in Stock Market Investing
2. Stock Investing Guide For Beginners