fattylikescake:

I hope this isn't a stupid question, but how can I avoid paying a load fee to buy American Funds? I know about the one million dollar exception, but unfortunately, I am not at that level yet.

Thanks,

Fattylikescake 

You can buy ASBAX at 2.5% load and then exchange the shares for other funds.

I have been advised to buy these six funds: CWGIX, ANCFX, AGTHX, AIVSX, NEWFX, AND SMCWX.  The money is in a Roth IRA and is going to be moved from an annuity into mutual funds.

Thanks,

fattylikescake

fattylikescake:

I have been advised to buy these six funds: CWGIX, ANCFX, AGTHX, AIVSX, NEWFX, AND SMCWX.  The money is in a Roth IRA and is going to be moved from an annuity into mutual funds.

Thanks,

fattylikescake

What percentages of each?  How old are you and when do you anticipating retiring?

CWGIX and ANCFX are the only two of the funds that you name that are worth the load IMO.  I think you can find no load funds that are just as good as the others that you name.

I have class B in the American Growth Fund of America fund and this class does not require an up front load and for each year a keep it, the back-end load is reduced.  After what I think is 5 years, the back-end load is $0.  I don't know how many funds have this kind of class option, but you could try looking into what is available.

C

I have been advised to buy these six funds.....

-----------------

Yeah.

Is the person doing the advising also the broker or  custodian of this acct?  If so, the loads  you pay will go into his pocket and that firm's pocket.  Ditto any future Roth contributions which you drop into American Funds.    I bet that broker drives a really nice car.   Probably has a nice yacht, too.   Did the same firm put you in the annuity that you are moving the proceeds out of?  Whoever sold you the annuity (which has limited usefulness in a tax-deferred acct such as a Roth) also pocketed fees off of you. 

Unless you view your Roth as a means to enrich your broker, you should consider moving the acct to a reputable no-load company.  Fidelity, Vanguard, and T Rowe are all solid, and have tons of choices.

Below is a link for a mutual fund comparison tool at T Rowe.   I am not saying go with T Rowe, they just happen to offer this wonder little tool.   You could just easily call up Fidelity, give them the six tickers you listed and ask them for comparable funds they could put you without paying sales charges. 

http://www.troweprice.com/common/index3/0,3011,lnp%253D10002%2526cg%253D1270%2526pgid%253D8283,00.html?scn=Looking_for_an_Answe&rfpgid=8277 

I just hate to see brokers lining their pockets on nice folks.  They need to go get real jobs.

pining4Lenore:

I have been advised to buy these six funds.....

-----------------

Yeah.

Is the person doing the advising also the broker or  custodian of this acct?  If so, the loads  you pay will go into his pocket and that firm's pocket.  Ditto any future Roth contributions which you drop into American Funds.   

Fatty - the load you pay goes to the advisor as pining4Lenore states.  You will also be paying ongoing 12b1 fees to the advisor.  If you buy other than A class shares as others have suggested, you pay higher 12b1 fees and expense ratios so in the end, it could be a wash.

If you buy ASBAX first as I suggested and then exchange those shares for the other American Funds shares, you pay a 2.5% load on the A shares and no additional load on the exchange, although there may be a transaction fee from your broker.

I don't doubt that a broker wouldn't like that idea because they make less money off of you, but you can cut your load signficantly if you do it this way.  ASBAX isn't without principal risk, but neither are any of the funds you mentioned.

Of the funds you named, only CWGIX and ANCFX are worth the load IMO.  There are plenty of good no load funds out there if you do your research.

"I just hate to see brokers lining their pockets on nice folks"

 So do I.....

You know what I hate worse, though.......

I hate when people think the problem is (AF's) loads, when in fact 'people' lose more money making investment mistakes on their own, then they would ever have paid in loads for the right funds!

t

As far as the buying the bond fund and then switching to an equity fund routine, does this have to be done at American funds or can it be done at a brokerage (Fidelity, Wellstrade, or Scottrade etc.). 

Dan 

You pay the load either way with A or B shares, pick your pathway!

Whats up with the annuity in a ROTH, thats the first I heard that one.  I know all about annuity in a 403b..........yikes!

Is this advisor a totally new guy who is advising you?  Do you have any idea what is going on with this annuity and transfer or are you just going with the flow? 

We would really need to know more about you to offer anything other than "dont pay loads".

Has your current advisor learned these things about you? 

Brian

DAN:

wait 30-60 days, and make the change anywhere...nuff said!

t

hurleyhuckster:

Whats up with the annuity in a ROTH, thats the first I heard that one. 

If the advisor that advised her to buy an annuity in a Roth is the same advisor that is picking her AF funds, she needs a new advisor.

100% totally agree for sure......

t