Load Fees and Mutual Funds
1. Do you think it is worth paying the initial load fees mutual funds sometimes require? Why or why not? Please explain your reasoning.
It is not worth paying the initial load feeds that are at times necessitated by mutual funds. The initial load fees are disadvantageous to investors largely for the reason that it negatively impacts their capability to earn more money from the mutual funds. For instance, if a mutual fund carries an initial load fee of 6.25 percent, it implies that the broker will obtain $625 for every $10,000 that is invested in the fund. The inference of this is that the investor is left with $9,375 to begin with. The implication is that the investor has to find a way of earning back this amount of $625 that was given to the broker in order to break even. Moreover, the investor ends up losing the compounding of the initial load amount paid as the financial market rises. These amounts can progressively rise to become significant in a number of years, and in the end negatively impact the returns generated from the investment (Bold, 2011).
Another reason why payment of the load fees is...
References
Bold, A. (2011). Why Investors Should Avoid Load Funds. US News. Retrieved from: https://money.usnews.com/money/blogs/the-smarter-mutual-fund-investor/2011/03/01/why-investors-should-avoid-load-funds
Greenberger, I. (2017). Why Invest In International Equity Mutual Funds? Investopedia. Retrieved from: https://www.investopedia.com/articles/mutualfund/08/international-equity-mutual-fund.asp
Lim, P. J. (2017). Worried About U.S. Stocks? Put Your Money Here Instead. TIME. Retrieved from: http://time.com/money/4955301/europe-stock-market-cheaper/
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