Understanding the Difference Between Load and No-Load Funds

 

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Funds
Image: investopedia.com

Darin Pastor is a successful business executive currently leading Capstone Affluent Strategies, a private wealth management firm based in California. Darin Pastor started his career in the financial industry managing and selling mortgages, insurance, and mutual funds before he became a top financial advisor and investment manager at Wachovia Bank and JPMorgan Chase.

A mutual fund is a portfolio of stocks or bonds or a combination of both that gives financial benefits to investors including diversification, accessibility, and stability. Investors can maximize the return of investments in mutual funds by having a clear understanding of the difference between load funds and no-load funds.

Load funds are mutual funds that charge a fee. That fee is paid to an advisor or a broker for doing all the research and mutual fund transactions on behalf of the client. The total charge is a combination of a percentage of the amount invested and a sales fee that can be taken up front or at the time the mutual fund shares are redeemed.

Unlike load funds, no-load funds don’t charge a fee or commission for the shares purchased or sold. They therefore minimize expenses and maximize profits over the long term. Because there are usually no third-party advisors or brokers involved, the investors themselves typically have to conduct their own research, monitor the market, and do the actual trading.

In general, investors who can make strategic purchasing and selling decisions do not benefit from investing in load funds.

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Three Important Characteristics of an Entrepreneur

 

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Entrepreneurs
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An established financial executive, Darin Pastor serves as the chairman and chief executive officer of Capstone Affluent Strategies in California. In 1989, Darin Pastor started from working under his father’s guidance at Pepsi Cola Buffalo, a company that was founded by his grandfather in the 1940s. The entrepreneurial influence passed down from his grandfather and father has helped him succeed in his professional career both in the lending and financial industries in the last 29 years.

Entrepreneurs have unique characteristics that make them successful at what they do. Three of these characteristics worth mentioning are creativity, a strong knowledge or understanding of the industry, and drive.

Individuals who are creative are curious, idea-seekers, and have a positive reaction towards change. From starting a business to implementing a service, creativity plays a vital role in ideation and experimentation. In addition to being creative, entrepreneurs who possess a strong product and industry knowledge can meet customer needs and overcome market uncertainties brought by competition and other external factors. When the novelty and excitement of starting a business vanish, people who have a strong drive to see it through, do the boring aspect of the company, and rise above the challenges achieve success.

Differences between Top-Down and Bottom-Up Investment Strategies

 

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Darin Pastor
Image: capstonefinancialgroupinc.com

An MBA graduate of the University of Liverpool, Darin Pastor serves as the chairman and chief executive officer of Capstone Affluent Strategies. Darin Pastor is responsible for all aspects of the company’s operations, including sales management, recruitment, and investment strategies to manage the assets of both individual and institutional clients.

Wealth managers use different investment styles to minimize risks and maximize wealth. Two common strategies in portfolio investment are top-down and bottom-up investing.

The top-down approach looks at macroeconomic factors such as gross domestic product (GDP), inflation, interest rates, currency behavior, and the individual sectors of the economy. Analysts choose the specific industries that have the highest performance before they invest in the stocks of companies within those industries. This approach assumes that a company in an industry that does well under the current economy is a good investment.

In contrast, the bottom-up approach focuses on the company and the microeconomic factors that determine the investment worthiness of its stocks regardless of market conditions. These factors include financial ratios, revenues, analysis of financial statements, company products and services, and organizational structure. Bottom-up investing assumes that a company that is profitable and has a strong business foundation can generate a positive return on investment relative to the industry and the economy.

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