I take a very simple approach to investment products: I believe that most people, in most situations, are best served by buying low-cost index mutual funds or exchange-traded funds that only invest in stocks or bonds for their long-term investing. Anything more complicated than that was probably created by the financial intermediary (bank, brokerage firm or insurance company) so its salesmen could sell more products.
Investing will have some combination of the following costs: sales commissions or loads to buy, sell or hold the stock, bond, or fund paid to the brokerage company and the broker, if applicable; fees for advice related to the stock, bond or fund paid to an Investment Adviser; management fees and other costs for stock or bond funds paid to the fund company; and costs for taxes paid to the appropriate governments.
These costs vary greatly among the different investment types, and should be strategically minimized to the extent practical. Costs shouldn’t be the only thing that matters, just one of the more important considerations. Minimizing costs is a great way of maximizing your returns.