Load vs. No Load Mutual Funds
Etnyc
time to conduct your own research or need somebody to hold your hand.
Other then that you just plain out 5% or so. Nowdays there is plenty of
understanable investment information you can easily access to make your
own decision. Most investors will be better of with one to three major
well known mutual fund then with a brocker trading for them.
Et
George Matthew Regnery
Well, I can think of a legitimate reason to have a back-end loaded fund,
especially if the load fees are distributed to the fund, and not to the fund
management company.
When you cash out of a mutual fund, basically everyone else in the mutual
funds bears some of the costs, because the fund has to sell assets and incur
brokerage fees. Of course, all funds have some very short term cash
reserves, and can match new purchases and sales. But if too many people cash
out, then the other shareholders bear some of the cost. A back end load
discourages "market timers" and other switching types. If the fund
management company adds the load proceeds to the fund's assets, then that, in
some way, compensates the other shareholders.
Some funds have diminishing back end loads, to encourage people to keep money
in the fund for an extended time span.
--
George M. Regnery | "Geschichte ist keine Abfolge von Daten, sondern ein
reg...@ix.netcom.com | sich ueber die Dimension der Zeit erstreckendes Netz
----------------------| in welchem Vergangenheit, Gegenwart und Zukunft
zusammengewoben sind als Schicksal." --Cusco, von Ring der Delphine
William Rini
--
bil...@rain.org
http://www.rain.org/~billman/syn.html
Larson Douglas Hudson <ldhu...@jcbradford.com> wrote:
>As the mutual fund marketplace becomes increasingly competitive,
>consumers are becoming more cost-conscious in their investing habits.
>No-load funds may appeal to the investor who wants to put all all of his
>or her money to work right away. And many investors may not recognize
>the added value investment professionals bring to the table. Before
>balking at the idea of paying a sales charge, you may want to review the
>following points.
>
>1. Investors get what they pay for. It's easy for an investor to guess
>what he or she may need for the future. But by guessing too high,
>investors may take unnecessay risks to "over-achieve," and fail to earn
>the returns they will actually need to provide for the future. When
>investors guess too low, they may not have enough. Investment
>professionals can provide much of the information many investors need to
>determine theri future financial needs, set realistic long-term goals,
>and develop an investment plan that can helpt them reach those goals.
>
>2. Part of an investment professional's job is to know the markets.
>Today, there are nearly 5,000 mutual funds available-more choices than
>you'll find on the NYSE. And just like on the stock exchanges, it's not
>always easy to tell the winners from the losers. Sifting through them
>is a complex, time-consuming job. And making the wrong choice can be
>much more expensive than the one-time sales charge of less than 5
>percent.
>
>3. A financial adviser can help investors monitor their investments on
a
>regular basis, and modify their portfolios as their needs change.
>Investing is a process, not a one-time decision. Successful investors
>review their portfolios regularly and make adjustments when necessary.
>By monitoring current market conditions and changing personal needs, and
>investment professional can keep assets invested in teh types of mutual
>funds that are best suited to help an investor meet his or her goals.
>
>
>
>
>--
>Larson Douglas Hudson, Investment Broker
>J.C. Bradford & Co.
>330 Commerce Street, Nashville, TN 37201, USA
>email: ldhu...@jcbradford.com phone:(800)748-9569
>
>
Paul Maffia
>In addition, many load funds offer B-shares that essentially eliminate
>any sales commission for the long term investor. To be clearer, they are
>simply shares that carry declining back-end loads, which usually
>disappear after the 4th year. My clients know that their mutual fund
>investments are a longer term play. The philosophy of mutual funds is
>not TIMING, but TIME.
What unadulterated BS. Typical garbage coming from a commission wonk. And
a clear illustration of the type of broker to steer clear of.
"B" shares may have a declining back-end load that disappear after a
stated time period. But you carefully managed to avoid ponting out that
they carry hefty 12B1 fees whose sole purpose is to pay commissions to
"brokers". And when they fail to point out this simple fact, they just
have not earned those continuing commissions for themselves and their
employers.
Paul M.
George Schmitt
> brokers. His belief that B-shares are "expensive and bad" for investors
> has no basis in fact. I won't even bother addressing it. The topic of
Get out the latest Barron's (date Apr 10 1995) and look through
the quarterly fund section. Notice that the B shares have higher
12b-1 fees. Notice that whereas an "A" share might have 0.25, the
"B" shares might have 1.00. Please bother to address this issue.
Thanks
-George
Bill Sullivan
<ldhu...@jcbradford.com> says:
[snip]
>unwarranted. In addition I feel that when posting, it is proper to stick
>to the topic at hand and refrain from slanderous/grandiouse language. It
>is my hope that an intelligent exchange of ideas can take place without
>it degenerating into petty misplaced character attacks.
[snip]
If one wishes to practise grandiloquence, one may. And then one's language would
be grandiose.
Not just a commission wonk. A defensive commission wonk. :-)
Bill Sullivan
Seth Jackson
:
: Well, we all now know how Mr. Mafia feels about load funds and investment
: brokers. His belief that B-shares are "expensive and bad" for investors
If you disregard his inflammatory language, there's still the point that
"B" shares carry 12b-1 fees. This is a valid point, and I can't find any
valid reason why you would not want to address it.
--
Seth Jackson
Arthur Wouk
Larson Douglas Hudson <ldhu...@jcbradford.com> wrote:
>1. Investors get what they pay for.
first fallacy. where are the stockholders yachts?
>2. Part of an investment professional's job is to know the markets.
second fallacy. sheep know the grass, yes.
>3. A financial adviser can help investors monitor their investments on a
>regular basis, and modify their portfolios as their needs change.
anyone who needs such advice doesn't belong in the stock marjet.
--
--
arthur wouk
internet: wo...@cs.colorado.edu
Marc San Soucie
> Larson Douglas Hudson <ldhu...@jcbradford.com> says:
> > In addition I feel that when posting, it is proper to stick
> > to the topic at hand and refrain from slanderous/grandiouse language. It
> > is my hope that an intelligent exchange of ideas can take place without
> > it degenerating into petty misplaced character attacks.
> If one wishes to practise grandiloquence, one may. And then one's language
> would be grandiose.
> Not just a commission wonk. A defensive commission wonk. :-)
Funny. We've seen a few classic trolls from commission-hungry brokers in
this group over the last year or so, but Mr. Hudson's didn't strike me
that way at all. His original post contained three quite reasonably stated
arguments for why *some* people might benefit from the help of commissioned
brokers. While I wouldn't pay for his services, I certainly can't see how
his comments deserve ridicule. And he has been quite polite.
Marc San Soucie
Portland, Oregon
ma...@netcom.com
mgle...@freenet.vcu.edu
>>1. Investors get what they pay for.
>first fallacy. where are the stockholders yachts?
You'll find most yacht owners have product advisors :)
>>2. Part of an investment professional's job is to know the markets.
>second fallacy. sheep know the grass, yes.
?
>>3. A financial adviser can help investors monitor their investments on a
>>regular basis, and modify their portfolios as their needs change.
>anyone who needs such advice doesn't belong in the stock marjet.
Or instead of the "I have all day, to brouse through H.Q. or
Wal-Mart to find what I'm looking for" type of investor;
someone has his OWN profession so doesn't have the time or
INTEREST (yes, some people find investing and money matters
BORING!) They'll go to the local hardware and ask a
professional they trust to save their time.
Mike
--
Mike Gleason, Partner | "I ask, sir, what is the Militia?
Financial Services Consultants | It is the whole people, except
life & disability insurance | for a few public officials."
1-800-969-4151 Richmond, VA |George Mason, Author 2nd Amendment
William Rini
pay brokers the 5%. If you are educated enought to run your own
investments, then by all means do so, but don't bash brokers for helping
the others who can't.
--
bil...@rain.org
http://www.rain.org/~billman/syn.html
et...@aol.com (Etnyc) wrote:
>The only way it makes sense to buy load funds is if you cannot devote
the
>time to conduct your own research or need somebody to hold your hand.
>Other then that you just plain out 5% or so. Nowdays there is plenty of
>understanable investment information you can easily access to make your
>own decision. Most investors will be better of with one to three major
>well known mutual fund then with a brocker trading for them.
>
Martin Herbordt
In article <3mdu0e$b...@freenet.vcu.edu>, mgle...@freenet.vcu.edu writes:
|>
|> >>1. Investors get what they pay for.
|>
|> >first fallacy. where are the stockholders yachts?
|>
|>
|> You'll find most yacht owners have product advisors :)
Undoubtedly correct!
But, is `product advisor' the latest marketing-speak for
`stock-broker'? Has `stock-broker' taken on such a
perjorative connotation that brokerage firms
(advisement firms???) have found it necessary
to change the name of the position?
-Martin Herbordt
(ObA: But it's because we do MORE than sell stocks.)
William Rini
same expenses, front end or back end load. If you don't pay them front
end then you have to pay them somewhere.
The reason for back end load funds is simple.....most people are idiots
and given the choice between paying a front end load or buying a backend
load and paying higher fees over many years, they will pick the back end
load. No matter how much you can show them that this is the worse option
of the two, they will choose back end load because they don't see the
money they pay.
--
bil...@rain.org
http://www.rain.org/~billman/syn.html
sch...@cmf.nrl.navy.mil (George Schmitt) wrote:
>
>> brokers. His belief that B-shares are "expensive and bad" for
investors
>> has no basis in fact. I won't even bother addressing it. The topic
of
>
David Bakken
>>>3. A financial adviser can help investors monitor their investments on a
>>>regular basis, and modify their portfolios as their needs change.
>>anyone who needs such advice doesn't belong in the stock marjet.
>Or instead of the "I have all day, to brouse through H.Q. or
>Wal-Mart to find what I'm looking for" type of investor;
>someone has his OWN profession so doesn't have the time or
>INTEREST (yes, some people find investing and money matters
>BORING!) They'll go to the local hardware and ask a
>professional they trust to save their time.
Only if they really have 5% or so to throw away. They can
just get the annual Forbes report on mutual funds (out in
late August), arguably the best and most concise. And if
they choose a reasonably diversified set of 5-10 any mutual
funds that finished in the top third or so of Forbes' ranking
for their category, then the investor will probably do as well
as with a broker/advisor, or maybe even better -- they can avoid
the herd mentality of professional investment advisors. Or
they can just throw darts at a stock sheet and do practically
as well.
--
Dave Bakken, dba...@bbn.com, +1 617 873 6072
``If Nicole Simpson had owned a handgun, she'd be a wealthy widow today...''
-- unknown, quoted by Jeff Cooper
Seth Jackson
: I'll address it, the reason for the higher fees is because they have the
: end then you have to pay them somewhere.
Exactly. And this is precisely the point Paul was making. Mr. Hudson, in
his espousal of load funds, said that "B" shares eliminate the loads for
long-term investors. As you yourself have shown here, this is just so
much poppyyacht, er, I mean poppycock.
: The reason for back end load funds is simple.....most people are idiots
: and given the choice between paying a front end load or buying a backend
: load and paying higher fees over many years, they will pick the back end
: load. No matter how much you can show them that this is the worse option
: of the two, they will choose back end load because they don't see the
: money they pay.
And I would submit that the reason for front end load funds is the same
as the reason for back end load funds. Given the choice between paying a
load and not paying a load, why would anyone choose to pay a load?
--
Seth Jackson
William Rini
>
>>Or instead of the "I have all day, to brouse through H.Q. or
>>Wal-Mart to find what I'm looking for" type of investor;
>>someone has his OWN profession so doesn't have the time or
>>INTEREST (yes, some people find investing and money matters
>>BORING!) They'll go to the local hardware and ask a
>>professional they trust to save their time.
>
>Only if they really have 5% or so to throw away. They can
>just get the annual Forbes report on mutual funds (out in
>late August), arguably the best and most concise. And if
>they choose a reasonably diversified set of 5-10 any mutual
>funds that finished in the top third or so of Forbes' ranking
>for their category, then the investor will probably do as well
>as with a broker/advisor, or maybe even better -- they can avoid
>the herd mentality of professional investment advisors. Or
>they can just throw darts at a stock sheet and do practically
>as well.
that much trouble. Not knowing about investing may sound silly to you,
but there are people out there that only know of mutual funds as
something they always hear about on TV and from friends. It's a personal
choice of the particular investor.
I'm sure if I wanted to I could be my own auto mechanic, I could read
books on how cars operate and learn how to overhaul an engine, but I
don't have any desire to. I would rather pay a mechanic more than his
worth to do it for me. That's my choice. Am I an idiot because I can't
change my own brakes? No, I choose to spend my time on other
pursuits. Then why is it wrong for someone to pay someone to give them
some advice on how to invest their money? If they feel that they are
getting a fair value for the commission they pay then that's their
business and should not be the topic of debate by those who choose not to
invest that way.
Dennis Yelle
>
>If they feel that they are
>getting a fair value for the commission they pay then that's their
>business and should not be the topic of debate by those who choose not to
>invest that way.
We don't need your permission to chose our discussion topics, William.
We know that you sell mutual funds to your marks^H^H^H^H^Hcustomers and
put the load in your pocket. You are not an unbiased source.
We will continue to let everyone know that better funds are available
to all for no load via a toll free phone call.
The only people who tout load funds are salesmen.
--
den...@netcom.com (Dennis Yelle)
"It's a small mind that can think of only one way to spell a word." -- M. Twain
Marc San Soucie
> Given the choice between paying a
> load and not paying a load, why would anyone choose to pay a load?
Actually, there is one potentially redeeming value to loads on funds.
They can serve to reduce the tendency of hot funds to attract vast
quantities of money, thereby keeping them smaller, and potentially
more nimble. We do frequently complain about sudden growth in popular
no-load small-cap funds, after all.
sepa...@ais.net
> In article <3m674i$a...@adam.telalink.net>,
> Larson Douglas Hudson <ldhu...@jcbradford.com> wrote:
>
>
> first fallacy. where are the stockholders yachts?
>
>
> second fallacy. sheep know the grass, yes.
>
> >regular basis, and modify their portfolios as their needs change.
>
> anyone who needs such advice doesn't belong in the stock marjet.
The stock market is like any other thing that someone tries to do.
If you want to do well in something, invest the time needed to do
it well, or atleast in an informed way. Paying someone to play with
your cash can work, but you can also just be throwing away your
money. Whether loaded or not, past history for a funds returns in
the last cycle that most compares to the current one will most often
be more fruitful than a commision alone.
William Rini
>In article <3mi79l$m...@data.interserv.net> William Rini
<bil...@centcon.com> writes:
>>
>>If they feel that they are
>>getting a fair value for the commission they pay then that's their
>>business and should not be the topic of debate by those who choose not
to
>>invest that way.
>
there are people who load funds are suitable for and those who are not
suitable should not be so consumed with the topic. If someone makes a
choice to buy a load fund instead of going out and doind their own
research, who are you to tell them they are wrong?
Secondly, you are completely wrong. I have said many many times that I
am not a retail broker. I don't solicit any investments. The fact that
you totally took that last paragraph out of context so that you could
feed your ego by attacking me shows what a very sad little man you are.
Jim Craft
On Thu, 13 Apr 1995 Dennis Yelle <den...@netcom.com> retorted with:
:In article <3mi79l$m...@data.interserv.net> William Rini <bil...@centcon.com> writes:
:>
:>If they feel that they are
:>getting a fair value for the commission they pay then that's their
:>business and should not be the topic of debate by those who choose not to
:>invest that way.
:
:We don't need your permission to chose our discussion topics, William.
:We know that you sell mutual funds to your marks^H^H^H^H^Hcustomers and
:put the load in your pocket. You are not an unbiased source.
:We will continue to let everyone know that better funds are available
:to all for no load via a toll free phone call.
:
:The only people who tout load funds are salesmen.
Well I bought the Seligman Communication and Information A Fund
because it's the best sector fund out there. Show me another fund
that has a history as good as it that is no load. I bought it after
doing my own research, with which I drove my wife crazy with BTW, and
did not need to ask my broker as whether or not it was a good fund.
The numbers are right there ...
If you guys have such an aversion to paying commissions what do you do
when you buy an automobile, clothes, computer equipment, and a many
other items for which the salesman is paid a commission for the sale?
Until you've worked as a commission sales person you have NO idea what
the hell you are talking about. It can be demoralizing, degrading (as
some of you guys are forcing), and at times unbearable. You don't
bash the sales person because he's commission, you bash the bloody
management that forces them to work as commissioned employee's.
Don't make fun of the pizza delivery person until you've delivered a
few yourself!
Jim
--
Jim Craft
Disclaimer: "Maybe all I need besides my pills and the surgery
is a new metaphor for reality" -- Dis con nec ted
Queensryche, Promised Land (1994)
William Y Huang
I like back loaded fund. Reasoning: Good no-load funds, like Magellan
or Ultra, quickly grows to multi-billion dollars and become virtually useless.
Back loaded funds discourage people from liquidating during an economic
downturn .... which hurts everyone in the funds. I know the statistics
are not on my side but ....
FYI I invest in Alger fund (midcap, smallcap, and growth).... small, good
consistent performance, and nobody's ever heard of it! Perfect as far as
I'm concerned.
William Rini
based on what the no load advocates are saying? Even if the numbers
prove you wrong, but it psychologically makes you feel better knowing
that people will incur a penalty for bailing on the fund during a bad
market.
This is not a black and white issue people. Load fund advocates will
usually conceded that there are many good no loads, finding a no load
advocate that can do the same about load funds is rare. Of most of the
rubbish going back and forth on this subject, I have noticed some very
interesting things.
First, even when the subject had nothing to do with no loads (ie the
discussion was on the differences between front end load and back end
load funds), no loaders felt the overwhelming need to jump in and take
quotes out of context to switch the debate back to load vs no load.
Second, the no load camp seem to be a RIGHT or WRONG bunch. Whenever the
subject of choice between load and no load comes up, they don't want to
let people like William here make that choice. According to many of the
no loaders, William has had to have been tricked into buying load funds
by evil, vile, salesmen (brokers).
Third, other than a small bunch (yes Paul Mafia you are part of the
small bunch that actually knows what you are talking about as far as
numbers and returns go), most no loaders just blindly spout off
information they have heard others say. Many don't even understand the
concepts behind the claims they make, but they heard someone else say it
and they don't like paying commissions, so it must be true.
I said it before but the only use that came out of it was one no loader
misquoted it to serve his own purposes, but I'll say it again. It is a
matter of choice, if I don't feel like going out and buying a book,
crawling underneath my sink, and unclogging my drain myself, I hire a
plumber. Could I do it myself? Probably. Do I want to? No. Am I
willing to pay $75 for someone else to replace a $5 piece of plumbing?
Yep. The same goes for load funds, many people don't want to take the
time and put in the effort to make their own choices, so they willingly
hire a broker to do it for them. And as long as the broker is doing a
good job and choosing funds with respectable performance with regards to
the amount of risk the client is willing to endure, then that's what they
should be able to do.
George Nassiopoulos P-353 495-7181
: Until you've worked as a commission sales person you have NO idea what
: the hell you are talking about. It can be demoralizing, degrading (as
: some of you guys are forcing), and at times unbearable. You don't
: bash the sales person because he's commission, you bash the bloody
: management that forces them to work as commissioned employee's.
^^^^^^
wow! sounds like slavery...
George Nassiopoulos
nas...@cfa.harvard.edu
Tracy Monaghan
...more like indentured servitude.
Tracy <mona...@cac.washington.edu>
Professional Computuhsaurus Trainer
University of Washington
Seattle, Washington
pmitra@.oracle.com
> business and should not be the topic of debate by those who choose not to
> invest that way.
>
>
planner suggested stocks consistently beaten the market? I was reading a
book which says that in most cases such folks would like to sell what is
most profitable to them - not the customer. This is understandable if I
were a broker I would have done the same. From the customer's point of view
if he bought funds/stocks by "throwing darts at a stock sheet" as suggested
above I believe he would have done a decent job. Now don't tell me choosing
a random
collection of funds or an index fund is tough.
Seth Jackson
Could you be a little more careful with your attributions? I did *not*
write the paragraph that you attributed to me.
William Y Huang (wyh...@raman.ucsd.edu) wrote:
: I like back loaded fund. Reasoning: Good no-load funds, like Magellan
: In article <3mios1$5...@hollywood.cinenet.net> spe...@news.cinenet.net (Seth Jackson) writes:
: >
: >
: >: The reason for back end load funds is simple.....most people are idiots
: >: and given the choice between paying a front end load or buying a backend
: >: load and paying higher fees over many years, they will pick the back end
: >: load. No matter how much you can show them that this is the worse option
: >: of the two, they will choose back end load because they don't see the
: >: money they pay.
: >
--
Seth Jackson
William Rini
funds out there. With the constant bashing by Money Magazine, other
media and folks in discussion forums like this, I find it funny that load
funds like ICA remain some of the largest (as measured by assets under
managment).
And what people are paying for is service and piece of mind. I have one
former client that I still give advice to (without any sort of
compensation) that says I'm not his broker I'm his shrink. There have
been several times he has called me worried about an investment, ready to
bail out, and I simply make him review his reasons for buying it in the
first place, ask him if any of those conditions have changed, and then
ask him based on that, do you still think you should sell the stock. That
is what you are paying for, and if your broker is not giving that to you,
find another broker, don't insult me and the industry.
Seth Jackson
: I didn't ask for your permission. I was simply making the point that
: there are people who load funds are suitable for and those who are not
: suitable should not be so consumed with the topic. If someone makes a
: choice to buy a load fund instead of going out and doind their own
: research, who are you to tell them they are wrong?
While I have and will continue to argue against load funds, I think the
above statement is valid, and I can't go along with blanket statements
condemning all stock brokers are sleazoid semi-crimials. Blanket
generalizations like this have a tendency to be wrong and sometimes even
dangerous.
I do think there are a lot of sleazy practices in the investment
industry, and many are caused by the pay structure in most investment
companies. That's not to say that a broker can't provide a valuable
service to an investor who simply can't or doesn't want to do the
research himself.
The fact that we are reading this newsgroup is an indication that we all
have some level of interest in mutual fund investing, and for people like
us, I would say that there is rarely a good reason to buy a load fund. If
anyone asks my personal advice, whether they read this newsgroup or not,
I would recommend no-load investing. But I don't see a need for personal
attacks on a whole group of people because they are making money advising
people who can't or won't do the work themselves.
BTW, in the only dealing I ever had with a broker, I got screwed pretty
badly. Fresh out of college, with a few grand to play with, I went to a
Merrill Lynch broker with a specific investment in mind. He managed to
talk me out of it and into something "just as good" because he woudn't
have made a commission on the investment I wanted. My investment ended up
more than quadrupling in value within 6 months; his investment lost all
of its value. Of course, I had my money in his investment, not mine.
I still won't write off the possibility that there actually might be some
brokers out there, although I doubt I'll be using one any time soon. I
would feel better about the profession as a whole if I started seeing
evidence that brokers were being honest with their clients about the costs
and available investment options. Maybe some SEC regulations are needed
to change the pay structure so that brokers' best interests coincide with
their clients' best interests.
--
Seth Jackson
J bruce Havekotte
financial advisor for youself as opposed to the best investment for
yourself. Go to seminars; read; learn the difference between legitimate
input and marketing hype. The more you know about investing the better
equiped you are to choose an advisor that shares your best interests.
Major point: If he (she) charges a commission there is a basic conflict
of interest!
-
J BRUCE HAVEKOTTE SLD...@prodigy.com
John Healey
I would recommend that you research funds with either a back-end load
that can be phased out after 4 to 5 yrs or a no-load proprietary fund.
** I also would not invest in "ANY" fund that has in excess of $250
million.
** Remember the more money the fund manager has in the fund
the more difficult it will be for him to bring in higher returns.
I hope this helped.
John Healey
I dont think so.
J bruce Havekotte
500. This is a large cap rally.
Sanjay
Hi:
I think one should invest, in a fund that gives more bang
for their buck regardless of load or no load fund. One
should not look at fund from "load" or "no load" perspective
but from "return" perspective.
Everybody has different investment philosophy, but within
the sectors (e.g. fixed income, stocks, global, currency,
gold, etc.), try to find the best mutual fund, that gives
more return for a particular time-horizon. Of course in
case of load funds, the return should be at least equal to
the sales charge plus return on the similar no load fund.
There is nothing wrong with Load funds, but their return
should be better than no load funds, in order to justify
their "sales charge" to their shareholders...
Of course, if you feel you are not getting the returns, from
your "load" fund as compared to "no load" fund, you can
always switch. But, remember, you are making investment
decisions, for long haul and not for 1-2 yrs.
--Sanjay
** of course, these are my views only.**
** Do your research before investing..**
William Rini
make a lot of worthless claims too.
I'm not defending load funds here, but if you are trying to advocate
no-loads you are doing them a diservice by using such illogical examples.
Otherwise everybody will be running return numbers through their
computers and coming to conclusions like:
In 1982 during the months of July and December, 4 load funds beat the
S&P500 and no noloads beat it during that time period, so load funds
perform better in July and December. Or maybe that the computer shows
that immediately following an earthquake, no loads showed better
performance than load funds, so buy no loads right after a major
earthquake.
NOTE: I MADE THIS DATA UP FOR THE PURPOSE OF ILLUSTRATION.
William Rini
>
>BTW, in the only dealing I ever had with a broker, I got screwed pretty
>badly. Fresh out of college, with a few grand to play with, I went to a
>Merrill Lynch broker with a specific investment in mind. He managed to
>talk me out of it and into something "just as good" because he woudn't
>have made a commission on the investment I wanted. My investment ended
up
>more than quadrupling in value within 6 months; his investment lost all
>of its value. Of course, I had my money in his investment, not mine.
>
>I still won't write off the possibility that there actually might be
some
>brokers out there, although I doubt I'll be using one any time soon. I
>would feel better about the profession as a whole if I started seeing
>evidence that brokers were being honest with their clients about the
costs
>and available investment options. Maybe some SEC regulations are needed
>to change the pay structure so that brokers' best interests coincide
with
>their clients' best interests.
>
>--
>
> Seth Jackson
compensation.....the firms. And their interest is in tying both the
broker and the client to the firm as best as possible. Is it any mystery
why, when a new broker comes aboard, they take him and fill him with
product knowledge of the firm's products, pay special incentives for
selling those products and then agree not to agree with the other firms
about transfering in house mutual funds out to another firm. It ties the
customer up, forcing him/her to either sell or stay with the firm, and it
keeps the broker from leaving if he should feel his/her client's
interests might be better served somewhere else.
What is amazing, and of course we don't see much in the press about it,
but I see it every day in my work, is that there are a good number of
brokers deciding to go independant. They don't work for a firm, they
hire a brokerage to be their clearing agent. They seem to sell a lot of
no load funds as an accomodation to their clients. Some even use it as a
marketing tool. Why is it when freed from the big brokerages, brokers as
a whole (there are always exceptions) seem to work for lower commissions
and sell products that either make them very little money or none at all.
Could it be because they don't have a branch manager breathing down their
necks because their gross was down for the second month in a row? From
my discussions with these brokers, that seems to be the biggest reason.
Of course they would like to make money selling these types of products,
but they feel that it helps establish a relationship, something that they
felt they could not do when they had production numbers to meet.