Posts Tagged ‘load fees’

7 Things you need to know before you invest in a Mutual Fund

Posted October 12, 2008 by Bernz

1) Know what you will use the money for. List your goals and determine if they are short or long-term. By doing this you have an easier time making other investment decisions.

2) Determine your risk level. Think about whether you’ll lose sleep over worrying about the possibility of loosing your principal or the uncertainty of a fluctuating market.

3) Consider whether or not you can do without the money you’ll be putting in your investment and how long you are willing to leave it untouched. This of course depends on your goals. Plus, the longer you have a mutual fund the more you’ll incur fees and other costs.

4) Account for sales charges and fees. The costs of having your mutual fund professionally managed eats into your profits. Avoid mutual funds that charge front-end or load fees. These are expenses deducted from your initial investment that will have an impact on your returns.

5) Choose a particular fund style. Mutual funds are categorized into three: growth, value, and blend. Growth stocks are shares in companies which are generating profit at a face rate. Value stocks are shares in companies who may be experiencing rough financial times, and they’re bought at a cheaper price for that reason. Blended funds are a combination of growth and value stocks.

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