Why you should be Investing in No-Load Funds

Making money through investing is not free. It might seem like free money because you don't have to go to work, do your job, and then get a paycheck. In actuality you are paying for it with your time. When you decide you want to buy some stock, you don't just think it and watch it happen. You have to find a broker, research the stock you want, and pay a commission. That is not free.

One type of investment is a mutual fund. With a mutual fund everyone who invests in it put their money together which the fund manager uses to buy the stocks they choose. With load funds you have to pay a commission, but with no-load funds, you pay no commission. This is the closest you'll get to free investment money because you pay no commission and you don't have to research the stock choices.

There are many obvious and not so obvious advantages to no-load funds. When you don't pay a commission, you save money. Also, the money you save is purchasing you more investment which also earns you more money.

With investing, you put your money to work for you. If you invest more, your more will earn more. With no-load funds, you get to put all the money you invest to work.

As I mentioned, another way that investments cost you is through time and effort. If you are buying stocks and bonds, you have to research the company you are buying shares of stock from. If you just invest in a company that you blindly pick from the newspaper, you are greatly increasing the risk of your investment.

Just researching is not enough. You have to know how to research first. This will take a certain amount of time in education, whether through books or a college degree. It can take from 100 hours of reading and studying to 1000 hours of formal education. This is valuable time that could be spending at countless of other places.

When you invest in mutual funds, your fund manager chooses the stocks for you. They research the firms, put in their time, and use their expertise to effectively diversify your portfolio. The only time you have to spend is choosing the mutual fund. This is usually a one time thing because you don't need to continue to diversify your portfolio as your fund manager is.

You can choose a loaded fund, but you'll pay for it. Even if it does earn more than a no-load fund, the earnings will probably even out in the end. Plus, you can never be guaranteed a rate of return. Invest in a mutual fund for the easiest, most diversified portfolio, instantly.