Why student loans are better than credit cards

Written by Vanessa McHooley


Why student loans are better than credit cards

You need some more money for college expenses this semester. Do you whip out a credit card to pay for your books, or do you apply for a federal or private loan? Well, considerrepparttar options –

-With a federal loan, your interest rate will be low (around 5%) and your payments will be deferred until 6-9 months after graduation. -With a private loan,repparttar 112059 interest rate will be slightly higher than with a federal loan but will still be lower than average. In addition, you will only need to make interest payments until after graduation. -With a credit card, onrepparttar 112060 other hand,repparttar 112061 interest rate can be as high as 21%. Interest begins accruing almost immediately, and you need to begin paying offrepparttar 112062 billrepparttar 112063 next month.

This is not to say that credit cards do not have a place in your college life. It is good to have one national card (Visa, MasterCard, Discover) on hand to help you build a positive credit history and to provide security in emergencies. When you decide to apply for a card, compare annual fees, interest rates, and introductory offers. And to keep yourself out of debt, try to—

Best No Load Mutual Funds: The Right Way to Look at Fees and Expenses

Written by Sam Subramanian


When searching forrepparttar best no load mutual funds, some mutual fund investors often tend to focus exclusively on mutual fund fees and expense ratios. Is this always a smart way to select mutual funds?

Metrics such as price/earnings ratio and dividend yield onrepparttar 112058 S&P 500 index, a commonly used proxy forrepparttar 112059 U.S. stock market, are hardly at bargain levels. This has lead several market pundits to predict single digit annual returns for domestic mutual funds overrepparttar 112060 next decade.

While pursuingrepparttar 112061 search forrepparttar 112062 best mutual fund, some mutual fund investors tend to focus exclusively on fees and expense ratios. The rationale is that by choosing mutual funds with low fees, investors will have more of their capital invested. Also, no load mutual funds with low expense ratios will pass on more ofrepparttar 112063 returns they earn to their shareholders.

Is shopping forrepparttar 112064 lowest fees and expense ratios a smart way to select mutual funds? Not always. The answer depends onrepparttar 112065 type of mutual fund you are evaluating,repparttar 112066 time you can devote to evaluating and managing your mutual funds investments, andrepparttar 112067 type of cost incurred.

Investing inrepparttar 112068 Best No Load Index Mutual Funds.

If you believe markets are generally efficient and prefer to invest in an index mutual fund to achieve an index-like return, shopping forrepparttar 112069 best index mutual fund based on low fees and a low expense ratio makes good sense. The portfolio manager of an index mutual fund endeavors to investrepparttar 112070 fund’s assets to trackrepparttar 112071 index as closely and cost-effectively as possible. Larger index funds have an advantage in that they can spread their operating costs over a larger asset base.

Some ofrepparttar 112072 interesting index mutual fund options currently available include no load index mutual funds like E*Trade S&P 500 Index Fund (Nasdaq: ETSPX), Fidelity Spartan 500 Index Fund (Nasdaq: FSMKX), and Vanguard 500 Index Fund (Nasdaq: VFINX) with expense ratios of 0.09%, 0.10%, and 0.18%, respectively.

Investing in Actively Managed Mutual Funds and Strategies.

Mutual fund fees and expenses are just one of several important factors to consider if you believe portfolio managers can add value and out-performrepparttar 112073 index through active management. The portfolio manager’s ability and investing style are just as important. Therefore, seeking outrepparttar 112074 best mutual fund based on just low fees and a low expense ratio may not always berepparttar 112075 right approach. It may just be a case of being ‘penny-wise and pound-foolish’.

Legendary investor Peter Lynch, who managedrepparttar 112076 Fidelity Magellan Fund (Nasdaq: FMAGX) from 1977 to 1990, achieved returns well in excess ofrepparttar 112077 market averages even after accounting forrepparttar 112078 fund’s fees and expenses.

So too has Bill Miller who currently managesrepparttar 112079 Legg Mason Value Trust (Nasdaq: LMVTX). Even after accounting for its relatively high 1.7% expense ratio, this no load mutual fund has achieved compound annual returns of 18.6% forrepparttar 112080 10 year period ending in 2004, well in excess of 12.0% forrepparttar 112081 Vanguard 500 Index mutual fund.

AlphaProfit, an investment research firm that specializes in active sector investing, usesrepparttar 112082 no load Fidelity Select Funds to implement its investing strategy through its Core™ and Focus™ model portfolios. Although notrepparttar 112083 lowest,repparttar 112084 expense ratio ofrepparttar 112085 no load Fidelity Select Funds compares favorably with that of other sector fund offerings. AlphaProfit prefers Fidelity Selects for their comprehensive coverage of sectors and industry groups. The AlphaProfit model portfolios have significantly outperformedrepparttar 112086 market averages over time.

Ensuring Your Mutual Fund Puts Your Interest First.

Whether you prefer to index or take an active approach to managing your investments, ensuring that your mutual fund is putting your interests first is good investing practice.

Mutual funds charge different types of fees. By looking at some key factors pertaining to fees, you can get a sense of whetherrepparttar 112087 mutual fund puts your interests first or merely seeks to linerepparttar 112088 mutual fund company’s pockets.

Servingrepparttar 112089 Interests of Long-Term Shareholders. Some mutual funds impose short-term trading fees to discourage frequent trading of mutual fund shares. Frequent trading disrupts efficient management ofrepparttar 112090 mutual fund and increases operating expenses. A short-term trading fee can therefore actually be beneficial to long-term shareholders ifrepparttar 112091 fee is rightly treated byrepparttar 112092 mutual fund company.

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