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Some mutual funds want you to pay for the privilege of them (or your investment adviser) taking your money to invest. It's called a load, and it works like a cover charge to get into a nightclub. Luckily, there are such things as no-load funds. As the name implies, shares of these funds are sold without a fee paid to a broker or investment advisor.
The entire amount you invest in no-load funds goes to work for your returns. On the other hand, with load funds, right off the bat you're charged commission (not to mention other fees incurred over the life of the investment). Let's say, for example, you invest $25,000 into a load fund that charges a 5% commission. This costs you $1,250 off the top, bringing your actual investment down to only $23,750.
The often-cited horse race analogy argues against investing in load funds. Here's the logic behind it: Would you place a bet on a horse that had to start a race 200 yards behind the others? Well, maybe you would if you got a tip from a sketchy, trench coat-clad man in a dark alley. However, under most circumstances, it's not smart to put your money on that handicapped horse.
But some argue that at times that man in the trench coat (aka your broker) knows more about the horses than you do, and has a better shot at picking a winner. Also, sometimes these fees are unavoidable because some funds are available only through investment advisers.
Cost-benefit analysis can help determine when a load fund is worth it (in other words, when it will score you a load) and when it is better to "do it yourself" and avoid the fees. Load-fund fees range depending on share class and can cover a variety of costs, such as paper work and fund management.
Home / Markets / Innovation
Tuesday, November 13, 2007
Innovation: Apple's iPhone to Get More Competition
Donna Fuscaldo
FOXBusiness
New York--Apple (AAPL) may have wowed with its iPhone, but it doesn’t have a lock on the market.
Consumers should expect a whole
slew of iPhone-type cell phones in the coming months from some of the leading handset makers. While they won’t be exact replicas
of the iPhone, they are expected to have touch-screen capabilities, an easy to use interface and the ability to surf the Internet.
Next week, for instance, the LG Voyager hits Verizon (VZ) stores.
“The LG model Voyager is a touch-screen device that
has two touch screens,’’ said Lawrence Harris, a telecommunications analyst at Oppenheimer. “Well see additional touch-screen
models in increasing numbers.”
Touch-screen technology is clearly driving the adoption of the iPhone and resulting
in copycats, but it’s not the only reason more iPhone-type devices will flood the marketplace. Oppenheimer’s Harris said the
opportunity to easily surf the Web with these phones will also play an important part in market adoption.
“What’s
driving the success of many smart phone models is the ability to access the Internet with a regular browser as well as a good
size screen,’’ said Harris.
In the past, accessing the Web via a cell phone was a frustrating experience, since you
were forced to view the Web on a small screen and had to deal with sluggish networks. Thanks to touch-screen technology,
which enables the handsets to have larger screens, surfing the Web on a phone has fewer limitations.
According to Harris,
Nokia (NOK) is developing a touch-screen, Internet-access device specifically for Sprint’s (S) forthcoming Wimax network.
Verizon will likely talk up the speed of its network when it starts selling the LG Voyager, noted the analyst.
Analysts
point to Nokia, LG and Motorola (MOT) as just a few of the cell-phone manufactures that should roll out a line of touch-screen
cell phones. One analyst even thinks Research in Motion (RIMM), maker of the popular Blackberry device, could come out with
a touch-screen version. Already in the marketplace is the LG PRADA cell phone, which isn’t available in the U.S. The high-end
phone was launched before the unveiling of the iPhone. Officials at the companies weren’t immediately available to comment.
“What
really differentiates the Apple product is it doesn’t have a physical separate keyboard,’’ Shaw Wu an analyst at American
Technology Research. “Everything is one big screen. Apple started this new revolution.”
Other cell phone makers
will likely wait until next year to roll out their own touch screen cell phones in part because it’s not that easy to make
these types of phone, said Wu. What's more, some of the components are in short supply thanks to Apple and the iPhone.
Synaptics (SYNA), maker of touch-screen technology, is seeing a lot of interest from handset makers looking to incorporate
the feature, said chief executive Francis Lee. He said interest was sparked before the iPhone, when the PRADA phone was unveiled,
but has since been aided by Apple.
“When you have a market leader like Apple push out something like that, it
creates a lot of interest,’’ he said.
Synaptics doesn’t think its technology will only be exclusive to high-end phones.
Lee said the technology will likely find its way to lower-end phones, similar to how it’s played out with camera phones. Originally,
cameras were found only in pricier cell phones, but eventually they became standard even in cheap handsets. What’s more, Lee
said the technology can be incorporated into monitors and even notebook computers.
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