Invest in No-Load Mutual Funds

Why pay more than you have to? No-load mutual funds allow you to invest without incurring up-front sales charges. No-load mutual funds are just like other funds; you can choose them using the same strategies. In the end, however, you get to walk away without paying for the opportunity to invest. There are, however, other fees and charges to watch for with no-load funds.

Understand that no-load funds may offer higher returns. Since you do not pay sales charges with no-load funds, it is possible to earn more because you do not have to subtract sales charges from your total return.

Recognize that most load funds are sold through financial advisors, brokers and other types of financial representatives. Your loads go straight to them. In exchange, you are able to obtain investment advice, guidance and assistance with your mutual fund purchases.

Visit FundAdvice.com to find a long list of the largest load funds. On this site, you'll be able to find large load funds and compare them to no-load alternatives.

Visit MorningStar.com and use the tools provided to research and compare no-load funds.

Request prospectuses for funds that interest you or download them from fund Web sites. Review prospectuses carefully.

Consider fund objectives, performance and risk levels. Select the funds that best suit your needs.

Pay close attention to fees and expenses, as no-load funds are not completely cost-free.

Determine the amount you want to invest. Mutual funds have varied minimum investment amounts, ranging from the low hundreds to thousands of dollars.

Contact these funds directly to purchase shares. Many mutual funds will allow you to download a mutual fund account application and submit it by mail.

Tips & Warnings

• Many investment experts agree that load funds, in general, do not perform better or worse than no-load funds.
• If you don't have much money to invest, consider enrolling in an automatic investment program. You can start with a low minimum investment, often $50 or less, and have your monthly investment automatically withdrawn from your bank account. You may even be able to arrange to take advantage of automatic investing via payroll deduction.
• There is no advantage to selling a load fund in which you've already invested. Since you've already paid an up-front sales charge, there is no benefit in switching.