Luhar
Dryer sheet wannabe
Hello,
I opened a Roth IRA through Scottrade and have started investing in no-load mutual funds. Scottrade charges $17 each time you purchase shares in a fund (unless it is a no-transaction fee fund, but I'm ignoring those here for arguments sake). I save money diligently and am curious how often people generally buy new shares. For example: If I have $1000 invested in each of five different mutual funds (diversified according to my investment plan) and I save $100 per week, then I have $20 per week that I can add to each of my five funds ($20 x 5 funds). If I invest my $20 in each of the five funds I will incur a fee of $85 (5 funds x $17 per fund). In this case I basically have an 85% expense ratio ($85 fee / $100 investment). My question: How much cash should I save before I invest it in my hypothetical five mutual funds? Is there a general formula people use?
Thank you in advance!
I opened a Roth IRA through Scottrade and have started investing in no-load mutual funds. Scottrade charges $17 each time you purchase shares in a fund (unless it is a no-transaction fee fund, but I'm ignoring those here for arguments sake). I save money diligently and am curious how often people generally buy new shares. For example: If I have $1000 invested in each of five different mutual funds (diversified according to my investment plan) and I save $100 per week, then I have $20 per week that I can add to each of my five funds ($20 x 5 funds). If I invest my $20 in each of the five funds I will incur a fee of $85 (5 funds x $17 per fund). In this case I basically have an 85% expense ratio ($85 fee / $100 investment). My question: How much cash should I save before I invest it in my hypothetical five mutual funds? Is there a general formula people use?
Thank you in advance!