Discovering Low Minimum Mutual Funds

Low Minimum Mutual Funds

Low minimum mutual funds can make all the difference in when investors actually get to start putting money toward their futures. Anything from poor performance to exorbitant fees or an inexperienced manager can cause problems once a person has started their mutual fund, but many high minimum investments keep people from even beginning their funds in the first place. The following article will take a look at low minimum mutual funds for prospective shareholders to consider buying into.

 

Finding Low Minimum Mutual Funds

Fortunately, there are investments you can begin with much less than several thousand dollars. It’s perfectly reasonable to not have a lot of cash lying around to begin your initial investment. Many people are in the middle of supporting a family, putting children through school, or reserving money for other things, like an emergency fund. Lower minimums attract novice investors to funds because of their accessibility.

 

The Downside Of Low Minimums

A smaller minimum isn’t always a good thing though. A lower minimum often means more shareholders. More shareholders mean that more records will be kept, which raises the potential for higher ongoing expenses. This means that funds with higher minimums may actually have less expenses. Companies like Vanguard use high minimums on purpose to keep their most profitable funds from seeing too many new investors. And there are situations in which a higher minimum can be outright waived for you if you become part of an agreement saying you’ll make contributions through an account regularly. Advisers can also help you sidestep a high minimum investment.

 

Finding Low Minimum Funds

With a long history of small-cap investing, Paradigm Capital Management is a trusted leader in small cap investing. The Paradigm Funds family of no-load mutual funds makes the firm’s small-cap and SMid-cap strategies available to fee-based financial advisers and retirement professionals. Paradigm Funds are widely available on more than 50 no-load platforms.

 

To learn more about how Paradigm Capital Management’s capabilities align with your long-term goals, please contact us at (518) 431-3500

For more info, please visit here: http://paradigmcapitalmanagement.weebly.com/

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Finding Value in No Load Mutual Fund Investing

What are you thinking when it comes to your no load mutual fund selections? Are you saving pennies and sacrificing dollars?

Are you spending your time looking at expense ratios, analyzing Morningstar ratings and searching for funds with low fees and no 12b1 charges? If you are like most people, you know these things in and out. You’ve spent hours evaluating them, and your chosen mutual funds cost little to purchase and maintain. But they still don’t perform to your hopes and expectations.

So, why is this happening? Because this kind of investing focuses on cost as opposed to value.

Investors with this philosophy have usually interviewed numerous advisors. But instead of trying to find someone suitable with a sensible approach, they only want to know who has the lowest fees. That’s like going to the cheapest auto repair shop and getting the best price, but your car still doesn’t run well.

Then there are the investors who call or email me wanting a recommendation on a no load mutual fund. They want one with no 12b1 charge, but they completely ignore the issue of how the fund might perform.

Both these kinds of investors spend their time trying to save pennies and in the process they are losing dollars. Here are some ideas that will assist you in evaluating the end profit rather than just the short term saving.

  1. Shift your focus from penny pinching to looking at the big picture: What can a mutual fund or an advisor do for you, not how much does it cost? Why? If you buy a given no load mutual fund at the right time and it gains a tidy 15% for you over a 6 week period, would you really care about the costs? If a mutual fund–or an advisor for that matter–can give you superior performance and an increase of several percentage points over your bargain price pick wouldn’t you pay an extra 0.25%?

  1. Consider finding a fee-based investment adviser who uses a facts-based methodology and has a track record indicating those kinds of returns. For example, in my own practice I used a trend tracking approach to get my clients into the market on April 29, 2003. Plus, our research and homework led us to recommending funds that gained anywhere from 11.50% to 22.00% over the following 6 week period. How did you do during that time? Do you think any of my clients care whether one of these funds has a small 12b 1 charge? Or whether they have the lowest expense ratios in the industry? I know they don’t.

The bottom line is to look at costs as balanced by performance and that’s where you find value. Then seek true value not simple savings, enjoy healthy dollar-level returns and don’t sweat the pennies.

With a long history of small-cap investing, Paradigm Capital Management is a trusted leader in small cap investing. The Paradigm Funds family of no-load mutual funds makes the firm’s small-cap and SMid-cap strategies available to fee-based financial advisors and retirement professionals. Paradigm Funds are widely available on more than 50 no-load platforms.

To learn more about how Paradigm Capital Management’s capabilities align with your long-term goals, please contact us at (518) 431-3500

Also read: Picking Profitable Microcap Stocks