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Average cost: This method calculates the average cost of all the shares you own and uses that average to calculate gains and losses. It’s commonly used for mutual funds. It’s commonly used for ...
One notable component of the expense ratio of U.S. funds is the "12b-1 fee", which represents expenses used for advertising and promotion of the fund. 12b-1 fees are paid by the fund out of mutual fund assets and are generally limited to a maximum of 1.00% per year (.75% distribution and .25% shareholder servicing) under FINRA Rules.
If you expect your income to decrease after you retire, then consider investing in a tax-deferred retirement account, like an IRA or 401(k). You can fund your account with pre-tax dollars and pay ...
Some kinds of funds (e.g., cash funds) cost a lot less to run than others (e.g., diversified equity funds), but a good fund should do better – after fees – than any cash fund over the longer term. In general it seems that there is, at best, a positive correlation between the fees charged by a fund and the returns it provides to investors. [3]
As well as a performance fee, a hedge fund will charge a management fee, typically calculated as 1.50% to 2% of the NAV of the fund, regardless of whether the fund has generated any returns for the investor. Hedge funds may also pay fees to administrators, prime brokers, lawyers, accountants and other service providers.
You can calculate this ratio by adding up the value of your investments (not including your home equity) and dividing that by your net worth. Generally, you want this ratio to be at least 50% ...
Often the management fee is initially based on the total investor commitments to the fund (i.e., the fund size) as investments are made. After the end of the commitment period, ordinarily four–six years, the basis for calculating the fee will change to the cost basis of the fund, less any investments that have been realized or written-off.
If you haven’t worried about money in a while, you might think your finances are in good shape. But is that true? These 4 questions can be a good start to understanding your financial health.