Everything costs money whether you like it or not. As they say, "there's no free lunch". Even that 'free' toothbrush you got at the dentist cost someone money. When it comes to investing, even though you are making money, it is not free. You pay commissions when you buy stocks and you have to put in the time to research and purchase it. It costs your time and some money.
One type of investment is a mutual fund. With a mutual fund everyone who invests in it put their money together which the fund manager uses to buy the stocks they choose. With load funds you have to pay a commission, but with no-load funds, you pay no commission. This is the closest you'll get to free investment money because you pay no commission and you don't have to research the stock choices.
There are many obvious and not so obvious advantages to no-load funds. When you don't pay a commission, you save money. Also, the money you save is purchasing you more investment which also earns you more money.
By investing you are making your money work for you. The more you invest, the more money you'll make. Investing in no-load funds allows you to do this seamlessly.
As I mentioned, another way that investments cost you is through time and effort. If you are buying stocks and bonds, you have to research the company you are buying shares of stock from. If you just invest in a company that you blindly pick from the newspaper, you are greatly increasing the risk of your investment.
There is yet another time costing activity to investing directly in stocks. You need to know how to invest and how to research stocks. This is going to take quite a bit of time and learning. Once you get going, this time will reduce, but you'll always be honing your skill.
With a mutual fund, you don't need to know much about investing because the fund manager does all this for you. On top of that, they have years of experience in choosing stock and can probably do a better job than you. You save hours and hours by only spending a small amount of time choosing a mutual fund. Mutual funds stay diversified, so you really only have to make this choice once.
If you want to spend a lot of money on fees and commission for loaded funds, you can, but it's likely they won't earn that much more money and they might even earn you less after the fees. If you are interested in having a well diversified portfolio that is very easy and cheap, get a mutual fund. - 20767
One type of investment is a mutual fund. With a mutual fund everyone who invests in it put their money together which the fund manager uses to buy the stocks they choose. With load funds you have to pay a commission, but with no-load funds, you pay no commission. This is the closest you'll get to free investment money because you pay no commission and you don't have to research the stock choices.
There are many obvious and not so obvious advantages to no-load funds. When you don't pay a commission, you save money. Also, the money you save is purchasing you more investment which also earns you more money.
By investing you are making your money work for you. The more you invest, the more money you'll make. Investing in no-load funds allows you to do this seamlessly.
As I mentioned, another way that investments cost you is through time and effort. If you are buying stocks and bonds, you have to research the company you are buying shares of stock from. If you just invest in a company that you blindly pick from the newspaper, you are greatly increasing the risk of your investment.
There is yet another time costing activity to investing directly in stocks. You need to know how to invest and how to research stocks. This is going to take quite a bit of time and learning. Once you get going, this time will reduce, but you'll always be honing your skill.
With a mutual fund, you don't need to know much about investing because the fund manager does all this for you. On top of that, they have years of experience in choosing stock and can probably do a better job than you. You save hours and hours by only spending a small amount of time choosing a mutual fund. Mutual funds stay diversified, so you really only have to make this choice once.
If you want to spend a lot of money on fees and commission for loaded funds, you can, but it's likely they won't earn that much more money and they might even earn you less after the fees. If you are interested in having a well diversified portfolio that is very easy and cheap, get a mutual fund. - 20767
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