Most discussions in past have centered exclusively on performance comparisons. Even rating services like Morningstar have occasionally chimed in with their opinion. However, rather than focusing only on performance, there are some other issues I consider far more important:

1. Who is selling load funds and why? 2. Who markets no load funds? 3. Which one is right for you?

Who is selling load funds and why? Most load funds are being sold through brokerage houses, financial planners and Registered Representatives. With few exceptions, most of those folks operate on basis of selling as much product as possible. They collect their commissions up front, as a back end charge, or both (usually in range of 5 - 6%). Whether you make money or not is not their primary concern. What matters most to those operating under this approach is how often you buy—and thereby generate new commissions for them.

Who markets no load funds? No Load funds are either marketed directly by mutual fund companies or, more commonly these days, offered through discount houses like Schwab, Fidelity, and many others. The advantage to this is that you have an unlimited choice of funds in one place and don't have to open separate accounts for each mutual fund family that you are considering.

Most fee based investment advisors, like myself, have independent relationships with such major discount firms and are able to offer clients just about any no load mutual fund available. They receive no compensation from firm and only get paid by client at a pre-determined fee arrangement. Under this arrangement, there is no hidden motivation to sell you a particular fund or to try and sell more in order to get a larger commission.

Which one is right for you? Whether you prefer dealing with someone selling load funds or an advisor getting you into no loads, let me make one thing very clear: You can make money or lose money either way! Why?

This story begins during height of investment madness in 2000, just prior to bear market. I had been managing an IRA account for "Bob" for around six years, with a better than average record of success. So I was surprised when Bob sheepishly called in July, 2000 to let me know he was transferring his IRA account, which had done particularly well during our latest Buy cycle going into year 2000.

However, his tax preparer, a long time personal friend of Bob's wife’s, was now also offering investment services, having recently received his Registered Representative’s license.

Fast forward to end of September. It had become increasingly clear to me that Bull market had run its course. So, in accordance with Sell signal from our trend tracking methodology, we sold all of our mutual fund positions on October 13, 2000 and went 100% into money market. (See my article “How we eluded Bear in 2000” at http://www.successful-investment.com/articles12.htm). From our safe haven we watched market crash and burn, causing most other investors to sustain double digit losses eventually reaching as high as 50 - 60% of their assets.

In 2002 Bob unexpectedly stopped by my office. As it turned out, things had not gone well at all with his IRA investments. As most advisors would have done, his tax preparer/advisor had quickly moved all of Bob’s assets into a variety of “load funds.”

Of course, being newly licensed he was clueless (as were many licensed advisors) as to market behavior or analysis of any kind. The end result was that Bob’s portfolio lost in excess of 50% over next 2 years. (Not to gloat, but my clients' losses in same period were non-existent.)

Unfortunately, degree of loss Bob sustained was experienced by many investors who did not follow a disciplined and methodical approach.