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Tip of the Day Have An Emergency Fund

Have An Emergency Fund - In life, things happen that we don't expect, car breaks down or an appliance dies, and unless you have an emergency fund tucked away you...

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Loads

Definition: Loads are sales charges issued by the mutual fund.  If you pay the charge up front, it's called a "front end load."  If you pay it when you sell your shares, it's called a back end load.

TeenAnalyst Advice: As a young investor myself, I stay away from mutual funds with sales charges.  A mutual fund with a front end load of 3% means that for every $100 you give them, only $97 is invested.  It might seem like you're only losing $3.00 but if you keep that money invested for 50 years, it'll end up costing you $353 in lost compounding!*

Most mutual funds today are referred to as "no-load" funds because they don't charge these loads.  I recommend you stick with one of those.

*Assuming 11% annual rate of return.

 

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Definition of the Day Appraisal Ratio

Appraisal ratio - An appraisal ratio is a ratio used to study a mutual funds managers performance with the mutual funds investments that he chooses. They higher the ratio, the better the performance of the manager. The job of the mutual funds manager is to pick the investments that will...

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