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BVC #23: Your Mutual Fund May Be Ripping You Off [VIDEO]
Posted By Jim On 12/02/2009 @ 10:09 am In Investing | 15 Comments
When it comes to investing, you can’t predict the future. What you can predict, with 100% certainty, is how much your broker is going to charge to get you there. If you’re like me, the majority of your stock market investments are in mutual funds in retirement accounts like 401(k)s, 403(b)s, and IRAs. While we can’t control how they will perform, we can be smart about where we invest by picking good funds with reasonable costs.
In this video, I look at some index funds, the easiest type of fund to compare, and how picking a low cost one can make a huge difference in your retirement nest egg.
Bargaineering #23: Your Mutual Fund May Be Ripping You Off  from JIM WANG  on Vimeo .
One final note, all index funds are not created equal. Could it be that Rydex is giving something extra for an expense ratio ten times greater than the big brokers? No.
This post is part of the Bargaineering Annual Financial Review  week series where we take a closer look at the four major facets of personal finance and see if we can do better. This post is part of day three – taking a closer look at your investments.
Despite Rydex’s much higher expense ratio, you don’t get much for it. If you look at this screenshot of Morningstar’s Fund Comparison tool , the returns aren’t exactly equal. The YTD Return (%) figure on the table already accounts for the expense ratios (which is why the Rydex YTD is so much lower).
After you compare pre-expense ratio YTD returns, Rydex beats the three others by less than a quarter of a percent. Oh, and the YTD doesn’t include the 1.00% deferred sales load or the fact that they are Class C shares .
Research your funds, it could cost you hundreds of thousands of dollars.
Finally, big thanks to Intuit and TurboTax for supporting Bargaineering and sponsoring this video. If you’re on Twitter, I invite you to follow @TurboTax  for more information on tax and product news straight from the experts.
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 Bargaineering #23: Your Mutual Fund May Be Ripping You Off: http://vimeo.com/7783381
 JIM WANG: http://vimeo.com/user1838946
 Vimeo: http://vimeo.com
 RYSYX: http://www.google.com/finance?q=RYSYX
 SWPPX: http://www.google.com/finance?q=SWPPX
 FSMKX: http://www.google.com/finance?q=FSMKX
 VFINX: http://www.google.com/finance?q=VFINX
 Bargaineering Annual Financial Review: http://www.bargaineering.com/articles/bargaineering-2009-annual-financial-review-week.html
 Morningstar’s Fund Comparison tool: http://screen.morningstar.com/Compare/Fund/FundCompare.html
 Class C shares: http://www.sec.gov/answers/mfclass.htm
 Money Magazine’s list of the 70 best mutual funds of 2009: http://money.cnn.com/magazines/moneymag/bestfunds/2009/
 @TurboTax: http://twitter.com/turbotax
Thank you for reading!