| Each week in this section, Chief Investment Strategist Alexander Green responds to reader questions. It's your direct line to the Chief! Have a question for Alex? Drop him a line at mailbag@oxfordclub.com. Reader: I am seeking guidance regarding the importance of mutual fund fees when rebalancing my portfolio [to match the Gone Fishin' Portfolio's allocations]. I have been invested in this portfolio for only one year, and my portfolio value is under $60,000. The fee for each mutual fund purchase trade is $74.95. Each of my trades would result in a total cost of trade (excluding fee) under $500, and there are four funds for which I should buy shares. The cost in fees for buying the four funds would be 15% of the total cost of all four trades. Is this a "reasonable" expense? Thank you for your guidance. - J.B. Alex: In this new era of zero commissions, it's not reasonable to pay $75 per mutual fund trade. Due to Securities and Exchange Commission regulations, we can't give personal financial advice, but as a general principle, The Oxford Club recommends our Members either purchase mutual funds directly though Vanguard or use a zero-commission broker to invest in the exchange-traded fund version of the portfolio. With that way of setting it up, adding to or rebalancing the portfolio will cost you nothing. You can also read more about minimizing expenses in our fourth Pillar of Wealth. [Editor's Note: To gain access to the Gone Fishin' Portfolio and all the model portfolios offered through The Oxford Communiqué, go here.] |
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