Comments on: Answers to Common Mutual Fund Questions http://www.americanconsumernews.com/2007/06/answers-to-common-mutual-fund-questions.html News for Consumers in Changing Times Sun, 12 Feb 2012 04:49:00 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Matthew Paulson http://www.americanconsumernews.com/2007/06/answers-to-common-mutual-fund-questions.html/comment-page-1#comment-742 Matthew Paulson Mon, 25 Jun 2007 17:27:00 +0000 http://www.americanconsumernews.com/2007/06/answers-to-common-mutual-fund-questions.html#comment-742 Great advice! I think there are some loaded funds that are okay to invest in, as long as you know what you're paying and even after knowing that the fee is there it still makes sense. <br/><br/>Capital Gains - You'll eventually pay the taxes on all of your investments whenever you sell the mutual fund, but you'll have to pay capital gains on any investments inside of the mutual funds that are sold during the year. This is why people should get mutual funds such as index funds with low turnover rates.<br/><br/>Financial Advisors - Read a bit more closely, you'll notice I said "fee only", meaning that you pay the fee to see them, and that's it. They won't make a commission on selling you anything, so that you know their advice is genuine and not swayed by financial incentives. Great advice! I think there are some loaded funds that are okay to invest in, as long as you know what you’re paying and even after knowing that the fee is there it still makes sense.

Capital Gains – You’ll eventually pay the taxes on all of your investments whenever you sell the mutual fund, but you’ll have to pay capital gains on any investments inside of the mutual funds that are sold during the year. This is why people should get mutual funds such as index funds with low turnover rates.

Financial Advisors – Read a bit more closely, you’ll notice I said “fee only”, meaning that you pay the fee to see them, and that’s it. They won’t make a commission on selling you anything, so that you know their advice is genuine and not swayed by financial incentives.

]]> By: BrokNowRchLatr http://www.americanconsumernews.com/2007/06/answers-to-common-mutual-fund-questions.html/comment-page-1#comment-741 BrokNowRchLatr Mon, 25 Jun 2007 17:01:00 +0000 http://www.americanconsumernews.com/2007/06/answers-to-common-mutual-fund-questions.html#comment-741 3 items to add<br/>1) They can also make their money via LOADs. But, as far as I can tell, you should basically never invest in anything with a LOAD. It is usually a way for advisors to get commissions.<br/>2) In mutual funds, you only pay taxes based on the annual turnover. S&P 500 index funds like the one you mentioned can have turnover around 7%. So, you pay little capital gains tax.<br/>3) A free financial advisor is a myth. They will get their money by selling you stuff that isn't right for you. A pay-per-session advisor will be well worth the money in the long run. 3 items to add
1) They can also make their money via LOADs. But, as far as I can tell, you should basically never invest in anything with a LOAD. It is usually a way for advisors to get commissions.
2) In mutual funds, you only pay taxes based on the annual turnover. S&P 500 index funds like the one you mentioned can have turnover around 7%. So, you pay little capital gains tax.
3) A free financial advisor is a myth. They will get their money by selling you stuff that isn’t right for you. A pay-per-session advisor will be well worth the money in the long run.

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