From: utzoo!decvax!harpo!ihnp4!houxz!hocda!machaids!as
Newsgroups: net.invest
Title: Re: Money funds, IRAs
Article-I.D.: machaids.226
Posted: Wed Jan 26 17:21:47 1983
Received: Sat Jan 29 08:48:03 1983
References: avsdS.310

	Regarding opening an IRA with a broker:  Remember that the broker gets a
commission (from your funds) every time you buy anything.  If you buy a mutual
fund with a broker, it will cost you over 9% on the funds actually invested
(8.5% taken off the top).  If you decided to move the funds to another broker
or company, that money is gone and you may have to pay new commissions.

	If you buy stocks or bonds not in a mutual fund, not only do you pay
commission, but you're left with a problem of what to do with dividends as they
are paid to you.  You want to reinvest them (easy in a mutual fund) but the
amount are usually too small to buy additional shares.

	To avoid both problems, the answer may be in no-load mutual funds.
These are available in many flavors (bonds and/or stocks in anything from
aggressive growth to lower payback but less volatile income or bond funds).
They have people making investment decisions who know more than we do about
investing (and have the information and means to really deal in the markets),
so the only real decisions you have to make are what your investment objectives
are in terms of potential for risk and for reward and which funds are likely to
do the best with respect to those objectives based upon past history.  Of course
there are no guarantees that the fund you choose won't start making terrible
decisions after you buy in, but at least mistakes (as well as successes) are
spread out over more stocks and your share of any mistake (or correct decision)
is much smaller than if you had bought 100 shares yourself.

	Since they have no sales commission, you have to do a little digging
to get the names and toll free numbers of the companies.  Any good public
library has publications on mutual funds (including no-loads) in its financial
section.  Watch out for some of the books (especially older, out of date ones)
with particular axes to grind.

	There's one publication that I like that I haven't seen in the library.
It's "The No-Load Fund Investor," P.O. Box 283, Hastings-on-Hudson, N.Y. 10706.
You can subscribe to their annual book (highly recommended to learn all about
these kinds of investments) and/or their quarterly updates (useful for tracking
your decisions).