Minimize Costs When Investing in Mutual Funds
Eric Tyson and Tony Martin
Published on Friday, Jan. 29, 2010 1:14PM EST Last updated on Monday, Feb. 08, 2010 1:33PM EST
This is the 4th in a series of ten excerpts from Investing for Canadians for Dummies.
When you select a mutual fund, you can use a number of easy, commonsense criteria to greatly increase the chances of your investment succeed. For any specific type of mutual fund (i.e., larger-company, Canadian stock funds), there are a hundred of choices available. The amount that you pay to purchase or sell a fund, as well as the ongoing expenses for the funds operation, can have a big effect on profit that you earn on your investments.
Remember: Fund prices are an important factor in the profit that you earn from a mutual fund because some fees are taken from your investment returns and can attack a fund from many angles. All other things being equal, large fees and other charges lower your returns.
Tip: Stick with funds that sustain low total operating expenses and that do not charge commissions. Both kinds of fees come out of your pocket and lowers your rate of return. A lot of excellent funds can be found at reasonable annual operating expense ratios (less than 2% for stock funds; less than 1% for bond funds).
VIA Globe and Mail
Keyword: Stock Investing
Eric Tyson and Tony Martin
Published on Friday, Jan. 29, 2010 1:14PM EST Last updated on Monday, Feb. 08, 2010 1:33PM EST
This is the 4th in a series of ten excerpts from Investing for Canadians for Dummies.
When you select a mutual fund, you can use a number of easy, commonsense criteria to greatly increase the chances of your investment succeed. For any specific type of mutual fund (i.e., larger-company, Canadian stock funds), there are a hundred of choices available. The amount that you pay to purchase or sell a fund, as well as the ongoing expenses for the funds operation, can have a big effect on profit that you earn on your investments.
Remember: Fund prices are an important factor in the profit that you earn from a mutual fund because some fees are taken from your investment returns and can attack a fund from many angles. All other things being equal, large fees and other charges lower your returns.
Tip: Stick with funds that sustain low total operating expenses and that do not charge commissions. Both kinds of fees come out of your pocket and lowers your rate of return. A lot of excellent funds can be found at reasonable annual operating expense ratios (less than 2% for stock funds; less than 1% for bond funds).
VIA Globe and Mail
Keyword: Stock Investing
