A look at no Load Mutual Funds

No-load mutual funds are funds sold by an investment company that does not charge a buying fee; opposite to that are loaded funds that have a buying fee added to the fund. When decoding the mutual fund charts the N.L. means no load. Once upon a time loaded funds carried with them a hefty fee, but in the past years this has been toned down considerably and no longer are 8% fees tacked on as a privilege to buying; more likely the fees are, at the most, only 4%.

Yet, with the slowing economy all buying and selling is to be done cautiously. The question that comes to mind here is why pay a fee for buying mutual funds when one can buy them without a fee? To understand that takes more knowledge than I have and even the experts have trouble agreeing how to answer. The best, most truthful answer that since this from its beginning has been a popular means of investing foI the average person with little money up front, a fee was charged. In other words the ability to buy mutual funds was seen as a priviliege.

As it was explained to me, mutual funds are a poor man’s dream: It allows a person with as little as fifty dollars to invest in the market. No longer must there be a hefty gamble of losing five or ten thousand dollars with one big sale. They are considered good buys for the long time investor who has no immediate need for his cash. And should he have he has ready access to it within about five days. Of course if this happens a fee with be charged. It all depends on the agreement made when the fund was purchased.

Mutual funds have been around in the United States since the World War 11 days; they have a history in Europe of being sold there from the beginnings of the 1800s. They differ from large investments in which large companies sell shares of their stock in that mutual funds are sold by investors who pool the money from their many buyers and buy stocks and bonds. Mostly they are diverse, meaning the stocks and bond bought are from many reputable sources.

They do this to cut down the risk of the buyers. The professional investors make their money by extracting a fee – a percentage – of the money earned from the combined investments of their buyers. What makes the no-load fund such an attractive offer to the average person who has a little extra money he is trying to grow into a potential hefty sum? If he has judged his investment company correctly and he trusts the integrity with his personal investor – his portfolio manager – all he has to do is to send in the money and sit back and wait for the results of his investment.

How will he learn about the good and bad investment companies? He checks around and daily reads the reports of those companies who make it their business to keep track of who is doing what in the investment business. A good way to learn who these are is to go online and type in ‘investment surveys + companies’ at Google. You will be given a list of companies and after a little while you will have settled on a few whose information you trust. You take it from there. When you check online you have a way of seeing your information is up to date.

Heady, Christy, The Complete Idiot’s Guide to Making Money on Wall Street, second edition, 1998, New YOrk, Alpha Books