Pump Up the Value of Your Portfolio by Avoiding

In such an uncertain economic time, adding a percentage point or two to your investment portfolio will add necessary value. So how can you add that valuable couple extra points? By avoiding fees. For instance, if you have a $10,000 investment that grows at 8% a year. After 10 years, you may have $22,000 but if there is just a 2% fee associated, the returns are decreased to 6% and you end up with $18,000 – 23% less money. The fees add up.

Avoid High Load Fees - A load fee is a charge applied to a mutual fund or insurance policy at the time of purchase. Sites like morningstar.com compare load fees to help you chose the least expensive one.

Examine Management Fees - Portfolio managers charge management fees, and depending on the type of fund the fee can vary. Equity funds tend to be higher than fixed income, and actively-managed funds have much higher fees than index funds (the average on an actively-managed fund is about 1.5% per year).

Undisclosed Fees - These fees are often related to trading and are often undisclosed to the investor. Since fund managers cannot make a trades for you without paying an institutional broker, this fee is then passed on to you and can be unlimited especially if a particular fund has many trades.

By ehow.com