Question

can someone help me with this?

Do you believe paying loads for investing in mutual funds is worthwhile? Why or why not? What should be your approach to costs within a 401K plan? What factors should you consider? Does your employer provide low-cost mutual fund selections? Is it important? What are the tax implications for both bf these funds based on turnover?

Answer 1

1.

Mutual fund investments make investors to pay loads, but it has worth, because it is used to cover the expenses involved in different functions of mutual funds management,  and it also creates an incentive to the team working for the mutual fund investments by different investors. In some of the mutual funds, loads are waived off, when the investment in mutual fund is kept for more than 1 year. Hence, loads also make the investors to carry the investment for at least one year. It gives stability to the investments made by the fund managers. Hence, it is for the benefits of the mutual fund investment planning as well as mutual funds holders.

3.

My company has its own financial planning consultant that counsels and help employees chose the investment plans including mutual funds. Here, the consultant does not only focus upon the lower cost, but also it focuses upon the risk preferences, return expectations, age of the investors and time duration of investments. It makes the consultant to correctly understand the needs of the employees like us and help us get suitable plans. It is important, as employees get honest assessment of the different types of mutual funds and on the basis of different criteria, they can chose the best mutual funds.

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