managed by the same fund management company. There is usually no cost involved in switching from a "loaded fund" to another fund. (most fund managers allow a few free switches in a calender year). However there is a cost involved if you initially invested in a "no-load" fund or "low-load" fund and now want to switch into a "loaded" fund. "Loaded fund" means a fund with an upfront sales charge (from 5% - 10%) attached. Most growth and balanced funds are loaded funds. Note: One way of knowing whether there is a load on the fund or not is to look at the Buy and Sell price. If there is a difference, then it is a loaded fund.
Switching is done when there is a change in your outlook of the economic situation and you desire to preserve the profits you have gained or to reduce further losses. Example: If you believe that the stock market has appreciated a lot and that further stock market upside is limited, you will then switch your Equity funds to a Money Market fund.
Alternatively, if you feel that the market has bottomed out and further downside correction is limited, you will then switch your Money market fund back into an Equity fund in order to benefit from the market appreciation again.
Switching is done when there is a change in your outlook of the economic situation and you desire to preserve the profits you have gained or to reduce further losses. Example: If you believe that the stock market has appreciated a lot and that further stock market upside is limited, you will then switch your Equity funds to a Money Market fund.
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