What are you thinking when it comes to your no load mutual fund 
selections? Are you saving pennies and sacrificing dollars?

Are you spending your time looking at expense ratios, analyzing 
Morningstar ratings and searching for funds with low fees and no 
12b1 charges? If you are like most people, you know these things 
in and out. You've spent hours evaluating them, and your chosen 
mutual funds cost little to purchase and maintain. But they still 
don't perform to your hopes and expectations.

So, why is this happening? Because this kind of investing focuses 
on cost as opposed to value.

Investors with this philosophy have usually interviewed numerous 
advisors. But instead of trying to find someone suitable with a 
sensible approach, they only want to know who has the lowest 
fees. That's like going to the cheapest auto repair shop and 
getting the best price, but your car still doesn't run well.

Then there are the investors who call or email me wanting a 
recommendation on a no load mutual fund. They want one with no 
12b1 charge, but they completely ignore the issue of how the 
fund might perform.

Both these kinds of investors spend their time trying to save 
pennies and in the process they are losing dollars. Instead of 
falling into the penny wise, dollar foolish trap, here are some 
ideas that will assist you in evaluating the end profit rather 
than just the short term saving.

1. Shift your focus from penny pinching to looking at the big 
picture: What can a mutual fund or an advisor do for you, not how 
much does it cost? Why? If you buy a given no load mutual fund 
at the right time and it gains a tidy 15% for you over a 6 week 
period, would you really care about the costs? If a mutual 
fund—or an advisor for that matter—can give you superior 
performance and an increase of several percentage points over 
your bargain price pick wouldn't you pay an extra 0.25%?

2. Consider finding a fee-based investment advisor who uses a 
facts-based methodology and has a track record indicating those 
kinds of returns. For example, in my own practice I used a trend 
tracking approach to get my clients into the market on April 29, 
2003. Plus, our research and homework led us to recommending 
funds that gained anywhere from 11.50% to 22.00% over the 
following 6 week period. How did you do during that time? Do you 
think any of my clients care whether one of these funds has a 
small 12b 1 charge? Or whether they have the lowest expense 
ratios in the industry? I know they don't.

The bottom line is to look at costs as balanced by performance 
and that's where you find value. Then seek true value not simple 
savings, enjoy healthy dollar-level returns and don't sweat the 
pennies.

© Ulli G. Niemann 

Ulli Niemann is an investment advisor and has been writing about 
objective, methodical approaches to investing for over 10 years. 
He eluded the bear market of 2000 and has helped countless people 
make better investment decisions. To find out more about his 
approach and his FREE Newsletter, please visit: 
http://www.successful-investment.com.