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 Watch out for some of the books (especially older, out of date ones) with particular axes to grind.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).