You can pay a penny on the dollar once and for all investment management or pay much more for asset management like some rich folks do. Does the latter guarantee good investment returns? No way. If they call themselves investment management companies or asset management firms, you lay your hard earned money down and you take your chances. Why pay more?
Investment management or asset management takes various forms for the patient investor. Hedge funds might charge 2% yearly plus 20% of profits, and aimc are out of bounds for the typical investor. You can’t legally invest there unless you are rich by normal standards. That’s fine with me because I’m not interested in paying big bucks for investment management that provides no guarantees. The good news is that there are some great investment companies out there that work cheap in my own opinion. If you’re like most people and lack the experience and skills necessary to control an investment portfolio, listen up.
Good investment skills take years to develop and few people ever develop them without losing considerable money during the educational process. Miss the aggravation and put the professionals to meet your needs on a budget. Mutual funds are the investment management alternative of choice for 10s of countless Americans. Why? That’s what they are made to do… manage money for individual investors that are certainly not rich or financially sophisticated. Now, let’s discuss good investment management for pennies on the dollar.
Not all mutual funds, especially stock funds, are produced equal as it pertains down seriously to the expense of investing. A $10,000 investment in the incorrect fund could set you back $500 off the top in sales charges plus yearly expenses of $200 per year, increasing with the worthiness of your investment. On the other hand, the same fund with a more favorable cost structure is likely available with no sales charges and yearly expenses of less than ½%, total cost of investing. The only real predictable investment performance difference between both is the expense of investing. Every penny you pay in sales charges and fund expenses comes right out of your pocket, and acts to reduce your net profit or investment return.
The very cheapest of investing are available in NO-LOAD INDEX FUNDS. There are no loads (sales charges) here and low yearly expenses, because the investment management team simply invests in the basket of securities which are contained in an index. For instance, if you wish to own a small element of a big portfolio of major stocks, an S&P 500 INDEX fund will have you dedicated to the 500 most valuable U.S. stocks for under a penny on the dollar, less than ¼% per year if you choose the proper one. The 2 largest fund companies in the united kingdom, Vanguard and Fidelity, offer no-load funds. One of them offers a nice selection of index funds at really low cost to investors.
I’ve followed mutual fund companies since early 1970s; and watched as the truly good investment management companies one of them grew to be some of the very most largest. I think they reached the top by offering good performance, good service, and an inexpensive of investing.
A retired financial planner, James Leitz comes with an MBA (finance) and 35 years of investing experience. For 20 years he advised individual investors, working directly with them helping them to achieve their financial goals.