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What I’m going to illustrate here is what it would have cost you to own a specific mutual fund last year, using the mutual fund cost calculator.

I’ve created an image (below) that you can click to enlarge. Within the image, I’ve highlighted 14 different areas that I will expand upon throughout this post.

I randomly selected a mutual fund that showed up on the results pages of the Kiplinger fund finder post from a few days ago. The name of the fund is the American Beacon Large Cap Growth Fund (ALFIX), a no load mutual fund.

Just answer a few simple questions

I then went to PersonalFund.com (btw, you have to create an account there using a valid email and password, which takes less than a minute to do) and inputed the name of the fund and a few other facts:

Continue Reading “The best mutual fund cost calculator - in action!”

I’m finally nearing the end of what was meant to be a one week gig. Somehow it’s turned into a fortnight, to borrow a British phrase used to describe Wimbledon.

I’m quite eager to move more into the ‘down home’ planning phase of the blog, over the coming month, but not before some hard hitting posts to end ‘mutual fund’ week. I’ve saved the best for last.

When I first wrote a piece on mutual funds, back in the beginning of August, I touched on the ‘mystery behind mutual funds’. Now it’s time to dive in head first and examine the murky world of mutual fund hidden fees. (I’m being a bit over dramatic for effect, after all, Halloween is next week)

Continue Reading “Mutual fund hidden fees- the biggest culprit is…”

Sometimes I come across prospective clients that want to work with me, but don’t want to be charged advisory fees.

Either they are the kind of people that have an aversion to being charged any kind of fees or they’ve had a bad experience, after being charged a lot of commissions, somewhere in their investing past.

Inevitably, I still want to convert them to my way of thinking. I will go through the whole process of why I believe an ETF fee based approach is the best way to build an investment portfolio, but much of what I say will go in one ear and out the other.

(Please note I’m generally wary of these type of people and may not take them on as clients, as I understand my approach may not be for everyone)

Continue Reading “Trying to fight the good fight”

Well today marks my triumphant return to the blog after a month away from the keys. All I can say is its good to be back and back with a vengeance.

I’ve spent the last few weeks cleaning up the blog and have made significant strides in resolving most of the technical issues that stopped me in my tracks. Like everything else in the universe, Chance favors will continue to evolve over time.

Lets get down to business…

Many posts ago I talked about offering up a series of posts on mutual funds. Well, I’d like to pick it up there. Over the next few days I will be offering a lot of information on the topic, as well as, links to other sites where you can get even more pertinent information.

Continue Reading “A Cost Comparison- The Real Cost of Mutual Funds v ETF’s”

I’ve been writing alot about passive investing (which anyone can do) and detailing pretty much how I run my business. One may think I’m giving away all the secrets, giving away the shop.

Why would I want to do something like that? If you show clients how its done then clients won’t need you, right? If you’re taking a passive investment approach then what am I paying you to do? to choose investments that I can pick myself?

There certainly is surface risk here but there’s risk in everything. It also bears noting that anyone can piece most of this stuff together, from various media sources, but I hope what will differentiate this site is the fact that you can find a lot of it in one place, one stop shopping:)

Continue Reading “Giving away the shop gladly!”

What should an investor do, opt for a passive investment strategy or go with a more aggressive actively managed strategy?

This is a tough question to answer and the debate will rage on and on and on and on. There are alot of powerful interests, with alot of money, on both sides of this debate, both fighting tooth and nail to debunk the other.

For the better part of three decades, from the early 1970’s through the 1990’s, actively traded mutual funds ruled the roost (this was really the only game in town)

Emergence of ETF’s

In the last 10 years the investing landscape has changed dramatically, with stiff competition now coming from ETF’s. Actively managed funds are competing for their livelihood, with ETF’s capturing an ever increasing share of their market. What does that tell you?

Continue Reading “Active Investing v Passive Investing? It’s a secondary decision in my book”

Sometimes when people find out I’m a financial planner they immediately ask me questions about individual stocks or the market. When I don’t know anything about the stock in question, they sometimes act surprised.

They say things to me like, “you’re in finance and deal with the stock market, how did you not hear about this?” “How come you didn’t hear about the merger between SO&SO and Them&US?” “You didn’t see that XYZ stock dropped 6 points today?”

Continue Reading “I don’t know much about stocks!”

I hope you can tell by now that I’ve put a premium on financial calculators that help you get to know yourself better. This last calculator I am going to look at is the most detail oriented, and comprehensive, of any of the savings calculator that we’ve looked at so far.

The Home Budget Analysis calculator can work in conjunction with either of the last two savings calculators we’ve examined and really helps to shed light on one’s financial underbelly.

In fact, many of the 6 calculators that I’ve written about can be integrated quite effortlessly. I’m looking forward to bringing you different scenarios where we get to use 3 or 4 different calculators within the same planning experience. Here we go…

Continue Reading “Home Budget Analysis - Calculator Explanation”

Ok as promised, I’m going to use the fear card to ’scare you straight’ on the issue of social security… are you shaking yet?

‘Scared Straight’ was an Academy Award winning documentary, filmed in 1978 by Arnold Shapiro, that deals with taking troubled teens to Rahway State Prison and introducing them to prison ‘lifers’. The hardened prisoners scare the hell out of the kids, talking about the harsh realities of what happens on the inside. In the end, the kids realize they don’t want anything to do with life in jail… effectively scaring them straight.

Continue Reading “Scared Straight on Social Security”

Often there’s not much transparency when it comes to letting clients know how advisors are compensated.

Advisors and brokers often dance around the issue and are hoping clients don’t ask them that question.

I know that was the last question I wanted to hear when I worked in the bank. It was one of the reasons I knew I had to get out of there and needed to switch to a planning and fee based business model.

(To be fair, these days, most banks offer fee based programs although I’d say it makes up a minority percentage of their business)

Cut and dry issue

These days, for me, talking compensation (generated from client asset management) is a very cut and dry issue. The overwhelming majority of my clients fall into one of two ‘fee based’ categories:

Continue Reading “How financial advisors get paid”