A Little Insight about Mutual Funds

You’re just beginning to enter into the investment world and it is an exciting experience for you but also one that can be quite daunting and a little overwhelming.   As you start this new endeavor all you are going to care about is how much money you have to put into your investment and what your rate of return on it is going to be.

Many individuals that are first starting out into investment choose to go with mutual funds.   You may be doing this on your own or are going through an investment broker. Most likely you are using a broker as you are new to this.

Most often when you are checking into your portfolio all you are going to see is how much you have in your account.   What you are not realizing is that there are fees associated with these investments and they can be a quite hefty without you realizing it.

This is all about to change in that there are new rules that have come into effect where now financial advisors must disclose what the fees are that are associated with the investment.   When you get your report you should now see these broken down.

Something that you want to be really aware of is if your fund is going to be subjected to the deferred sales expense.   What this means is that if you decide to sell your fund before a due date there could be a penalty attached to it for selling early.   You need to be aware of this so you can make informed decisions about your investment.

There is going to be far more transparency when it comes to investment such as the mutual funds.

There is a lot of information that you need to be aware of if you are into these funds.   You need to know what trades have taken place and what transactions and operating charges have been attached to it.

You need to know the planning fees, the accounting fees, as well as the transfer fees and any sales charge or trailer commissions.   There is a lot more that goes on with your investment money than what you realize and while you may be thinking that it is a straight and simple transaction where you win or lose with your investments there is a lot of in betweens to it that you need to be aware about.

This means that you also want to be very cautious with who you choose to act as your investment consultant making sure that you rely on a reliable individual that is well experienced in the particular type of investment that you are doing in this case it would be one that is well-versed in the mutual funds. You also want to rely on a quality accountant who is going to ensure that your investments are declared properly for tax purposes.


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Sam Seidman, CPA, CA, LPA
629 Sheppard Avenue West
Toronto, Ontario
M3H 2S3

Telephone: (416) 398-1700
Fax: (416) 398-6226

Chartered Professional Accountant, Chartered Accountant, Licensed Public Accountant


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