Mutual Fund Questions

[ctigers0714]

A few things I didn't understand when researching mutual funds...

One of the funds I came across had a negative expense ratio. That didn't make any sense to me because I know there's no way the fund managers could be paying us fees to invest in their fund. Does anyone know what this means?

Why would anyone invest in mutual funds with really high expense ratios? Does that guarantee better management and in turn higher returns? Seems silly to me when there are so many funds doing well with quite low expense ratios.

Final question, I have about 3k to invest and I wanted to invest in a mutual fund instead of getting into individual stocks. Does anybody have any recommendations?

[feh]

A few things I didn't understand when researching mutual funds...

One of the funds I came across had a negative expense ratio. That didn't make any sense to me because I know there's no way the fund managers could be paying us fees to invest in their fund. Does anyone know what this means?

Never heard of such a thing. What's the ticker?

Why would anyone invest in mutual funds with really high expense ratios?

They might have limited choices (such as what's offered in some 401K plans). Otherwise it's just people buying into marketing.

Does that guarantee better management and in turn higher returns?

Absolutely not. Most actively managed funds do worse than index funds.

Final question, I have about 3k to invest and I wanted to invest in a mutual fund instead of getting into individual stocks. Does anybody have any recommendations?

When do you envision needing this money that you're investing? What is your risk tolerance? What investments do you currently have?

[Petunia 100]

Final question, I have about 3k to invest and I wanted to invest in a mutual fund instead of getting into individual stocks. Does anybody have any recommendations?

What is the purpose of the 3k? Are you saving for something specific? Are your tax-advantaged accounts fully funded?

[ctigers0714]

The ticker is BRAGX if you want to check it out.

I'm still in college and this money is extra that I *hopefully* won't need to use for a couple years. I just wanted it to grow instead of sitting in my checking account.

[Petunia 100]

The ticker is BRAGX if you want to check it out.

I'm still in college and this money is extra that I *hopefully* won't need to use for a couple years. I just wanted it to grow instead of sitting in my checking account.

Bridgway says the ER is negative due to "the negative performance adjustment of the investment management fee under the Fund’s performance-based management fee structure."

http://www.bridgeway.com/strategies/mutual-funds/select/aggressive-investors-1/overview/

Do you have any earned income, so that you would be eligible to contribute to a Roth? Roth contributions (not earnings) can be withdrawn with no tax or penalty, at any time, for any reason.

If you're willing to put this money aside for at least 10 years, then stocks are the way to go. If you think you might need it sooner, then you take the risk that stocks may be down just when you want to spend the money.

If you want to stick with cash, then open an online savings account where you will at least get a little bit of interest.

If you are uncertain, a moderate balanced fund may be a reasonable way to go.

[ctigers0714]

I work 50+ hours during the summers and only 10 hours a week during school, so I do qualify for a Roth IRA, but that's not the use I'm really looking for out of this money. I'm going to continue adding to this fund for the next two years. I will probably use it right after I graduate for moving costs/paying back student loads from the fed before interest starts accruing/paying off remainder of car loan. I think a balanced mutual fund with a good track record would be appropriate for me.