The Retirement Challenge: Will You Sink or Swim?

Lesson 34 Costs Matter

Returns in the world’s equity markets are liberal, but finite. Anything you spend on fund management fees reduces those returns.

Mutual funds have two kinds of expenses: fully disclosed, and those that must be imputed. Disclosed expenses include management fees and loads.

•    Management fees include paying the managers, research, and expenses for accounting, legal, customer support, compliance, and sending reports to investors. Lower costs are better.

•    Sales loads or charges include front-end commissions (A shares), back-end or contingent sales charges (B shares), level loads (C shares), and 12(b)-1 fees. None of these add value to the investor. Avoid them all. Just say no. There is an entire world of no-load, ...