Fabulous Financials

Today is Friday so here’s another sound bite of Money 101 from the Nuru Personal Finance deck:

Mutual Funds

A mutual fund is a group or institution that invests your money for you.  Each mutual fund has a portfolio (a group of investments) which they believe will prove profitable.  When you give a mutual fund $10,000, you are trusting that its managers will invest your money in a way that is profitable to everyone.

Load vs. No-Load Funds

A “load” is a sales fee that you pay for buying or selling shares of mutual funds.  A load fund charges you sales fees.  A no-load fund does not charge sales fees.

Finding out whether a fund is a load or no-load fund is just one of the steps to researching the right mutual fund for you.  As a general rule, you are better off investing in no-load funds that have a low expense ratio.

I learned about load and no-load funds as I was doing the research for my non-retirement investment account.  One of the reasons I chose Vanguard is because their mutual funds are no-load AND they have low expense ratios.  An newbie investor’s dream.