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With numerous fees to be found on a detailed statement from any mutual fund, it’s hard to be sure you’re not paying too much in fees.

When you are trying to make a decision on which mutual fund to choose, the easiest way to think about fees and charges is to look at the fund’s expense ratio. It is usually easy to find and easy to understand because it simply combines all the possible fees together and presents a percentage of your investment that will be used for fees.

But if you want to know what some of the actual fees are, a recent Financial Planning summary helps us out:

• Management fees are basically what the fund uses to pay its management and employees, and they’re usually less than one per cent per year.
• Administrative fees cover other costs of the fund, including mailing, record keeping and communications, and they are on average less than half a per cent per year.
• Sales charges or loads are a percentage applied to the purchase in a fund - although some now offer ‘no-load funds’. Pay attention to these because some funds charge up to five per cent per year.
• Marketing and distribution fees also exist for some funds, but not all.

With financial woes circling the world, there are bound to be bargain hunters looking to pick up a stack of shares at low prices, but how can you be sure when you’re actually getting a bargain? Some tips from Carolyn Bigda can help you avoid getting burned:

1. Check the forward P/E of a stock - compare this to similar companies or the industry benchmark, and you want a ratio that is lower than average (but not super low)
2. Check the trailing P/E for the same kind of ratio as the forward P/E - so that you can be more certain that the company was operating similarly before any stockmarket crash
3. Check the price-to-cash ratio and compare it with similar companies again, and again look for a ratio that’s just a bit lower than average
4. Check the company’s balance sheet and figure out the stability by dividing the total assets by total equity - if the ratio is 2 or lower then you’re on a good thing
5. Check the news - because of course, all of the good ratios in the world mean nothing if there’s some scandal or huge lawsuit hitting the company whose stock you want to buy.

photo credit: James & Vilija

Most stock market investors in the United States are not really happy these days. But CNN Money has come up with a long list of 21 actions to take to make lemonade out of the lemons they’re getting from the stock market at the moment. Some of the highlights include these tips:

• Spend time you’d normally spend trading learning about how to trade better instead - read some great investing books and do some research online
• Get some tax write-offs by selling off some of your losses - but check the tax implications precisely
• Sell off your energy stocks while they’re at a high, and before they start to fall
• Ensure that your investing expenses are as low as possible - if you’re moving money around, make sure it’s to funds with the lowest possible fees, for example
• Swap some of your shares into more conservative stocks - they call it “tweaking your portfolio”
• Be extra aware of the danger of scams - scammers love to take advantage of people’s anxieties in economic conditions like those we’re experiencing now; the same goes for unscrupulous salesmen
• Move money out of government bond investment, because high demand has pushed down yields on these
• Make an effort to save more, knowing that it’s a short-term necessity

photo credit: j / f / photos

If you are interested in investing in some stocks outside the United States, then there is an easy way for Americans to do so, using the ADR system. ADR - American Depositary Receipts - are a way of investing in a company abroad without having to actually send money out of the country, as such.

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photo credit: swanksalot

Some finance people are calling the current state of the US economy a time of stagflation: but what is it, and how can we best deal with our finances during this kind of period? Some recent CNN Money tips might help you to deal with economic difficulties and your investments in these times. Being informed and staying prepared is, of course, always half the battle.

1. Understand stagflation: The economy is slowing down, but there is also high inflation - that’s what the experts call stagflation. It’s particularly nasty because unemployment problems could arise yet prices are increasing, so lots of people find themselves in trouble.
2. Stay in the stock market: Don’t be tempted to pull out your share investments during this time, even if their value is falling. You’re usually better off holding on to them and waiting for the market to rise again.
3. Invest in TIPS: Treasury Investment Protected Securities rise according to the rate of inflation so these can be a secure investment in times of stagflation.
4. Be careful with investments in general: There are not so many good ways to invest your hard-earned cash during these times, so make sure you research investment oppportunities carefully before making a decision.

credit: Darren Hester

Everyone with investments has been feeling the heat, their stomachs sinking each time the Dow dips another hundred points. But instead of double-guessing your investment decisions and diving into panic mode, Money Magazine recommends that you focus on your long term goals in relation to your investments. (more…)

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When you’re trying to decide just how to invest your hard-earned and saved money, the options are pretty boggling. If you decide on mutual funds, Joshua Kennon from About’s Investing for Beginners has a few tips that will certainly point you more in the right direction to choose the right mutual fund. Some of his advice includes: (more…)

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Everyone collects something: postcards from friends, teddy bears, paintings or stamps. But some of these collectible items can actually form the basis of an investment. But before you decide to sink your hard earned savings into some kind of collectible, do your research and check these cautions: (more…)

If through our investments in stocks, we play the market, then it’s important that we hedge our bets. There are many experts that volunteer to do the work for us, predicting upswings and downturns, telling us when to buy, when to sell, and when to hold. But Money Magazine’s undercover Mole warns us that predictions can urge us to buy and sell at the most inopportune times.

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Whether you’ve invested in mutual funds for years or are just starting out, finding the right fund for you is a delicate balancing act of fees, returns, and your personal finance goals. As you review all the information, keep in mind whether a mutual fund is no-load, or has a front-end load, back-end load, or level load.

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