Front-load mutual fund

[Mulligan]

O2B you missed a chance to have some fun. After being offered that "deal", you should have responded "I thought those 5% loads were illegal. I could have sworn I saw on an American Greed episode where someone went to jail peddling those 5% loaded funds".


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[Alan]

My DD has a employer sponsored Simple Plan that only offers front end loaded American Funds. I hate the fees but still recommend that she max out her contribution. She has recently become a partner so hopefully she can convince the majority owner to switch to a better plan.

My son is in a similar situation with his company's 401k and I was disappointed for him when I first saw them, but the front end fees are waived in his plan. You may want to check if your DD's contributions are indeed reduced by a front end fee before the shares are bought.

 

[MRG]

My son is in a similar situation with his company's 401k and I was disappointed for him when I first saw them, but the front end fees are waived in his plan. You may want to check if your DD's contributions are indeed reduced by a front end fee before the shares are bought.

I've seen that too.

 

[Walt34]

Crazy. Run.

Move your IRA to Vanguard or PenFed.

What he said.

That's near-insanity for someone who doesn't have a clue. Agree with the others that I would immediately sever my relationship with that bank. They are clearly just trying to fleece you.

 

[ERD50]

Good question and I'm not entirely sure. But I would think that the expense adjustment must be built in over time so they can show growth of $10,000 on an apples to apples basis.

Yes, I don't think the M* growth or $10k charts account for the 5% load because the chart starts out at $10,000 at time 0. That is why in the comparisons that I did in post #20 I took the ending values times 95% to account for the 5% load and get an apples-to-apples comparison with the no-load fund.

I agree it does not appear to be taken out. I'm guessing that they are figuring you could already have the money in there from more than 10 years ago, and often additions are not loaded (I think?).

So to take out the load, they'd have to make some statement like "Growth of $10,000 of initial investment after FE Load", but they should at least have a prominent notice that the chart does not reflect the FE load on new money.

-ERD50

 

[O2Bfree]

Thanks all! I'll walk on this one!

I think the OP answered all his own questions....

...her own questions .

 

[Animorph]

A "matured IRA"? Since it is at a bank I assume this is a CD. And here we are telling you to place it in a Vanguard equity fund. While that may be a good option, you need to consider how much you want in equities, bonds, and cash before you go switching between them. You may want to stay in a CD.

 

[O2Bfree]

A "matured IRA"? Since it is at a bank I assume this is a CD. And here we are telling you to place it in a Vanguard equity fund. While that may be a good option, you need to consider how much you want in equities, bonds, and cash before you go switching between them. You may want to stay in a CD.

Yes, it's a CD. I'm currently at 62% in equities and 32% in bonds, cash, and such. I'm almost 53, with $1.025 M in retirement assets, and hope to retire within four years. Perhaps my investments are a bit heavy on the risky side for where I am, but with the market as it's been, that hasn't been a bad thing. But it'd probably be ok to leave it in a CD.

At any rate, you guys got my ire up . Thanks!