Investment Fee study

[mickeyd]

http://www.zeroalphagroup.com/news/113006_release.cfm

Quote:

“On a $10,000 investment earning an annual return of 10 percent over 20 years, the average investor in no-load, no 12b-1 fee index funds would pay approximately $2,582 in operating expenses. The average investor holding a no-load fund that charges a 12b-1 fee would pay $3,744, while the average investor holding load index funds would pay $7,600 in operating expenses. Although one would expect using a professional adviser to improve an investor’s performance, instead the investor pays a significant penalty … We found that load index funds charged substantially higher fees – even before counting the fees paid to the broker – than true no-load (no 12b-1 fee) funds. In other words, when investors used brokers they paid twice: first, they paid the broker; second, they paid a broker penalty in the form of higher fund fees.”

Fees will surely eat up your total return over the long term. This is an interesting study.

[Bikerdude]

Just think of the cost if you were dumb enough to invest $1,000,000 with these funds/brokers.

Hey, on the bright side they probably would take you out to lunch once a year.

[FinanceDude]

Quote:

Originally Posted by Bikerdude Just think of the cost if you were dumb enough to invest $1,000,000 with these funds/brokers. Hey, on the bright side they probably would take you out to lunch once a year.

At $1,000,000 they would get NAV pricing, and not pay a load...........