How to Invest in No Load Funds Philadelphia PA

There are two basic types of mutual funds: a load fund and a no-load fund. A load fund means that you pay a sales charge. A no-load fund typically is a fund without a sales charge. However, there are no-load funds that do have sales charges. So if you are looking for a true no-load fund, stay away from those that charge sales charges.

Don't be confused though. Just because a fund doesn't have a listed "fee" schedule, doesn't mean that you don't pay anything. People often assume that no-load funds are the way to go because they don't pay any fees. The fund manager still needs to be paid. The trading fees still need to be paid. The costs of recordkeeping, etc., related to the fund still have to be covered. It's just covered inside the fund. So you are still paying, it's just not as obvious.

1. You can purchase a no-load fund through a broker or directly through the mutual fund company. You can make investments on a regular basis, such as monthly, or on a one time basis. You will need to set up an account with the fund company or with a brokerage firm and decide how often and how much you want to invest.
2. The hardest part is deciding which fund you want to invest in. You can research funds for free through a website such as Market Watch. You can also purchase comparisons that go into much more detail at a website like Morningstar. Don't just look at a one year return. Purchase a solid mutual fund with a good rate of return over 5 to 10 years. Even though you aren't paying a sales charge to buy a fund, you don't want to hop around from fund to fund. Find a good fund and plan to stay with it for a while.
3. There is a potential downside to purchasing a no-load fund; some research has shown that people who purchase a load fund do better than people who purchase a no-load fund - even if the no-load has a better rate of return. It appears that those who purchase a load fund tend to more around less. Those who purchase a no-load fund tend to bounce around. They often sell after the fund has gone down quite a bit and bail out just before it begins to improve. They get the worst on the downside and lose the upside. Load fund buyers tend to stick it out better and although they get the downside swings - like almost everyone, they get the upside gains to balance those out.

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