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Funds 105: How to Purchase a Mutual Fund

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1.
Investing with one of the more diverse fund families or a fund supermarket _______.
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Limits your paperwork. Investing all in one place makes recordkeeping easier and makes moving to and from funds a snap, too. And as long as you stick with one of the largest fund families, you'll have plenty of diversification options, too.
2.
A justification that some do-it-yourself mutual fund investors use for buying no-load funds is that _______.
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Since they are not getting investment advice in return, why pay a commission? For this reason, many prefer no-load funds.
3.
When you buy a load fund through an advisor, where does the load that you pay go?
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To your advisor. Loads are commissions that are paid to advisors. Fund managers receive a portion of the fund's management fee.
4.
Which of the following is not a way financial advisors are compensated?
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A part of the fund manager's fee. Advisors can charge you a fee or get a commission from products, such as mutual funds, that they sell. They can also charge a combination of fees and commissions. They cannot, however, take a portion of the fund manager's fee.
5.
If you use an advisor to buy mutual fund shares for you, he or she will be paid a commission by investing your money in _______.
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Load funds. Load funds come with a sales charge that compensates the advisor for his or her work.