Understanding The Expense Ratio And How It Affects Your Investments

When it comes to anything in life, you don’t want to pay more for anything if you don’t have to. Not wanting to pay for anything you don’t have to is also true with investing.

They are a significant factor when deciding where to invest your money. The flip side of it is how much its costs you to invest in any particular fund. That’s where the expense ratio comes in.

Don’t think because you aren’t investing millions of dollars that you can ignore these fees either. They may seem small, but even a slight difference in expense ratios will add up to any investor over the long term.

Why Are Expense Ratios Important?

The primary way and likely the easiest can be done using your brokerage accounts. When looking up any fund, you’ll typically see many of its attributes along with it.

How Do I Know A Funds Expense Ratio?

Any fund you invest in will have operating expenses, so no, if you are a mutual fund investor, you can’t avoid them.

Can You Avoid Expense Ratios?

You can invest most of your money with index funds while investing in a few mutual funds to see higher gains.

Which Investment Strategy Should I Use?