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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 / Personal Finance / Lifestyle & Money / Consumer & Debt
Wednesday, May 14, 2008
Foreclosures Reach All-Time High
FOXBusiness
As if Americans needed a further sign the economy is slacking, foreclosures for April hit and all-time high, rising 65% from a year ago, and 4% from March. The survey, conducted by RealtyTrack, included defaults, auction sale notices, and bank repossessions.
There were 243,353 foreclosure filings filed last month, the highest number on record with RealtyTrack.
Areas in states including Nevada, Arizona, California and Florida, Texas and Colorado are especially troubled, according to the survey.
Nevada holds the country’s highest state foreclosure rate, at 3.6 times the national average. An estimated one in every 146 Nevada homes is in foreclosure, according to RealtyTrack.
California ranked second with one in 204 households filing for foreclosure. Vallejo, California in particular had the country’s sixth-highest rate of foreclosures.
Foreclosure activity is expected to “remain high and even increase” in 2008, according to RealtyTrack Chief Executive James Saccacio.
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