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From: ecf_awjb@jhunix.UUCP (William J. Bogstad)
Newsgroups: net.invest
Subject: A comment on "no-load" mutual funds
Message-ID: <1982@jhunix.UUCP>
Date: Sun, 23-Feb-86 18:22:22 EST
Article-I.D.: jhunix.1982
Posted: Sun Feb 23 18:22:22 1986
Date-Received: Wed, 26-Feb-86 08:17:33 EST
Reply-To: ecf_awjb@jhunix.UUCP (William J. Bogstad)
Organization: Johns Hopkins Univ. Computing Ctr.
Lines: 52

<->

	I recently posted a request for help with investing and received
a number of responses.  I have shown them to a friend who is a
securities broker and she has written the following response.  She holds
a Series 6 securities license in the State of Maryland and is currently
working with First Investors Corporation -- a New York based investment
firm.  If you wish to respond or get in touch with her, send me a mail
message and I will forward it to her.

[NOTE: I have not yet made my own investment decisions.]

---[Message Follows]---

	I have noticed that there seems to be an overwhelming preference
for "no-load" mutual funds in this group.  While "no-loads" can be
beneficial to one who has a short term investment objective of six
months to a year, there can also be pit-falls.  I would like to alert
you to some of these "hidden loads".  Pull out your prospectus and look
for these things:

1. Redemption fees:
	A % of the total value of your balance is subtracted when you
	sell the fund.

2. Capital Gains:
	The distribution of capital gains is up to the discretion of the
	manager of the funds.

3. Dividends:
	Most "no-load" funds distribute 90% of the dividends to the
	shareholders.  Thus, these companies take 10% off of the top.

4. Custodial Fees:
	Many funds charge a % of the total value of your account each
	year.  Therefore, if a company charges 2%, over a ten year period that
	means a charge of 20%.  Much more than the 8-8.5% charge of a "loaded"
	fund.

	The bottom line is...  If you want to do the research yourself
and feel confident in making all of the decisions go ahead.  If you
aren't sure or don't want to spend the time being your own broker; find
a broker you trust and his advice will probably center around "loaded"
funds.

				Virginia S. Wesner

---[End Message]---

				Bill Bogstad
				bogstad@hopkins-eecs-bravo.arpa
				seismo!umcp-cs!aplcen!jhunix!ecf_awjb