Mutual funds are well known for their simple ability to offer diversification, while presenting less risk than alternative methods of investing. However, it is important to understand the fees associated with owning mutual funds. Fiduciary retirement planning advisor Mike Reeves of Strategic Wealth Designers joined us on the newscast to shed light on the fees associated with mutual funds and the impact that they have.
“Annual fees, management fees, advisory fees and marketing fees are just a few of the fees connected to your mutual fund,” Reeves says. “Depending on the mutual fund that you have, this can amount to three to six percent in fees annually. For every additional one percent paid in fees, this equals about ten to fifteen years of long-term income.”
Although the high fees associated with owning a mutual fund may sound unappealing, there is a time and a place for mutual funds.
“If you own or are thinking about owning a mutual fund, make sure that you are actively funding that mutual fund,” Reeves says. “Actively funding that account will ensure a quicker recovery after a market downturn.”
Mutual Funds, when well understood and selected carefully, can be a helpful asset in retirement planning. To see additional stories surrounding business and economic news for the Indianapolis area, visit https://CBS4Indy.com/Strategic-Wealth and if you have a question for Mike send an email to firstname.lastname@example.org.