Archive for July, 2008

How to Know Which are the Best Mutual Funds to Invest With

Thursday, July 31st, 2008
Muna wa Wanjiru asked:


There are different ways that you can use the money that you have earned. Investing in a mutual fund is one such way. The many different mutual funds you will find have many excellent options for you to try out. You will however need to look at the best mutual funds in order to find out which one or ones are more suited for you.

At the moment you will discover that Janus, Fidelity funds, Vanguard Group and others are among the best mutual funds that are available. In each of these mutual funds you will need to see how the funds compare with each other. There are many reviews that will provide you with information for choosing the best mutual funds

Before you invest with a mutual fund you will need to understand what a mutual fund is and how it will be of help to you. Basically a mutual fund is an investment company. This corporation pools the money of its investors together. With this money the investment company is able to buy diverse types of stocks and bonds.

The investors then share out the various stock and bonds that are in the pool. By investing these stocks the professional managers of the corporation is able to keep the clients’ portfolio in good shape. While this is a simple way to put the functions of mutual funds it helps to understand how a mutual funds group works. You can find out more information from the internet or from a trusted financial advisor.

The best way to look for the right mutual fund is to take your time. With the numerous mutual funds out there it is a bit difficult to know which ones are the best mutual funds to invest with. You can look at the Morningstar reviews to see which of the mutual funds are performing well. This preliminary research will help you to see the direction in which mutual funds are heading.

Once you have selected a few of the best mutual funds to investigate you should see what types of funds are being offered. As some of these funds have hidden charges it pays to understand what these funds are really. You will find this information in the internet or you can ask someone to clarify the details for you.

Even though all of these mutual funds are great investment possibilities there are always risks that potential clients face. For this matter you should give the matter of investing your money in a mutual funds group some serious thought. The bottom line is that no matter how good these many best mutual funds are performing right now tomorrow is another story, so take your time and invest wisely.



Tags: , ,
Posted in Investing | No Comments »

Why you Should Trade Etfs & Mutual Funds Rather Than Individual Stocks

Wednesday, July 30th, 2008
Groshan Fabiola asked:


You can be on your way to doubling your money in 3 years by trading Mutual Funds and Exchange Traded Funds (ETFs) rather than individual stocks.

DIVERSIFICATION

The most important reason is the diversification that Mutual Funds and Exchange Traded Funds (ETF) provide. With an individual stock you are exposed to the possibility that one of your stocks could get hit by bad news and plummet in price. It takes a long time to recover from one of these massive hits.

PROFESSIONAL MANAGEMENT

Skilled Mutual Funds managers spend every day determining which stocks to buy and sell. These managers companies have teams that examine quarterly and annual reports, interview Company executives; visit factories and review market share trends to get know the companies on a comprehensive basis, and avoid buying stocks when they are over-bought from a technical standpoint. There is no way an individual investor can compete with this level of sophistication.

ECONOMIES OF SCALE

Mutual Funds are able to take advantage of their buying and selling size to reduce transaction costs. This means a savings for the individual mutual fund investors enabling the individual investor to diversify without paying numerous commission charges involved in buying 15 to 20 individual stocks needed for diversification.

DIVISIBILITY

If someone only has $500 or $1,000 to invest, it is often insufficient to purchase an individual stock, especially after deducting commissions. Investors can buy mutual funds or add to their existing mutual fund holdings with a very small investment to keep their money working for them. With mutual funds, investors can hold fractional amounts as well.

GETTING STARTED

I invest my own money in every one of my Mutual Fund and Exchange Traded Funds trading systems. I subscribe to several advisory services to keep my universe of possible investments up to date. I utilize four different pieces of technical analysis software to determine which funds to buy, when to buy, and when it is time to sell.

I employ a strict stop loss and profit-protect methodology to keep my losses small and let my profits run. My approach is biased to the conservative side. I want to constantly upgrade my various mutual fund holdings so that I am holding the best mutual funds available.

Whenever I plan to buy or sell one of my holdings, I send my subscribers an email telling them exactly what I am doing, why I am doing it, and when I am plan to make the trades. I do the work so you don’t have to. And, importantly, it will take you less than 30 minutes per month to make the trades with your on-line broker. You too can join me and my fellow investors and double your money in the next 3 years.

Gerry Wollert has been trading stocks for over 40 years and mutual funds for over 25 years. He now manages his personal investments

Tags: , ,
Posted in Business | No Comments »

How exactly does mutual funds work?

Tuesday, July 29th, 2008
ratmforever asked:


Hello, as a beginner investor how do you actually earn money from mutual funds? I heard that it’s not about compounding interest and that it’s about the NAV on the day you wish to withdraw the funds that will determine your profit?

I had a perception that it was like time deposit, that your initial investment will earn interest and interest is added up to your initial investment and it will compound over time only that the interest rates varies every time. This is not the case in mutual funds right or is it?

Can someone enlighten me on this? Thanks.
Note: I know what a mutual fund is at least it’s general idea that it’s composed of diversified investments managed by a fund manager. My question is how do you earn technically? Is it like compounding interest or not?

Tags: , ,
Posted in Investing | 2 Comments »

Mutual Fund Alternatives – Discover Lower Risk & Higher Rewards

Friday, July 25th, 2008
Sacha Tarkovsky asked:


Mutual funds overall return poor results. A good one may return 10 – 12 compounded but with inflation, that’s not much and on the risk side 30% losses or more can occur and they can last for years!

Fact is most don’t even out perform the index, there are better alternatives with lower risk and higher profit potential and here we will look at one of them.

You won’t be surprised to learn that one is property but:

Here we are going to look at a high return low risk overseas market, where rewards are great risk low and just as importantly prices are cheap making the investment affordable to all investors.

Would you like up to 30% or more annual growth with low risk?

Most investors would and the market we are referring to here is a favorite of American and European investors - Costa Rica.

Consider these advantages:

A $30,000 investment in the popular resort of Jaco has increased in value in just 15 years to around $800,000!

What mutual fund can offer these returns?

Not many, but just as importantly property prices have risen steadily throughout the period with little downside volatility.

Why is the potential so good?

Quite simply ocean front property is up to 70% cheaper in Costa Rica than in the southern US states, so it offers an affordable alternative just a 3 hour direct flight form the US, in one of the most stable and beautiful countries on earth.

But it gets better!

Unlike a mutual fund, this mutual fund alternative offers you something more:

You can actually enjoy it!

You can have a holiday home that is an appreciating liquid asset, go there whenever you wish and when you are not there, you can earn an extra income from the booming rental market.

Is it easy to do?

Yes and there are many realtor’s who will advice you on the best deals and the best areas to buy in, which will hold or increase in value and prices are a lot cheaper than many people believe.

Also this investment offers the following benefits:

- Investing is made easy by the government

- Its extremely tax efficient

- Property taxes are very low

- You get the same legal rights as residents

If you want a high return investment which offers a great alternative to mutual funds and which you can also enjoy, make a secondary income from renting, then Costa Rica property offers you this and much more.

Its a lot cheaper and easier to do than many people believe, so make your mutual fund manager green with envy, with an investment that offers lower risk and higher rewards and you can enjoy.

Check out property investment in Costa Rica and you may be glad you did.



Tags: , ,
Posted in Investing | No Comments »

Reasons To Fire Your Mutual Fund Company: 12b-1 Fees

Thursday, July 24th, 2008
Mark Brandon asked:


The 12b-1 fee is the obscurely-named outrage that dings investors in mutual funds so that management can market the fund. In 1980, the mutual fund industry successfully lobbied the SEC to allow this fee with the justification that a larger fund lowers the expenses for everybody. In theory, the logic is right when you take into account the same expenses being spread over a larger pool of assets. However, there are several problems with this thinking:

1) A larger fund does not necessarily become easier to manage. Over the last 25 years, multi-billion dollar mutual funds have become the norm. When I worked for Fidelity in the early 1990’s, the largest fund in the world at the time, the famous Fidelity Magellan, was around $25 billion. Even then, concerns had set in that it had become too large to outperform the market. Since then, Magellan’s size has been a deterrent. Like a large barge, meaningful changes in its trajectory take too long to implement. Of the funds with in excess of $5 billion, most of them track the S&P 500 minus their outsize fees because that is all they can do. Yet, even these large funds continue to charge the 12b-1 fee.

2) Certainly, if a fund is closed to new investors (which makes the fund easier to manage), the existing shareholders should be relieved of the 12b-1 fee. But, as of November 2003, when the House introduced HR 2420, 139 closed funds still levied the fee. The funds are charging a marketing expense for funds that no longer accept new investors. Huh? Like ***** cocaine, fund management firms just became addicted to the stream of poorly disclosed fund fees.

3) A fund is able to call itself “no load” as long as the 12b-1 fee is 25 basis points (.25%) or lower, although many funds charge the max-allowable 100 basis points.

In practice, the 12b-1 fee is partially shared with advisers who tout the funds, and the rest is gravy to the fund firm. They do not disclose this fee as part of their management fee, and even obscure the fee in their overall expense ratio.

Two thirds of mutual funds charge this fee, and I would bet that few investors know about it. HR 2420, introduced by congressman Mike Castle of Delaware, sought to ban this fee for closed funds only, and even that was stalled in the Senate, despite broad bi-partisan support and backing from the white house.



Tags: , ,
Posted in Mutual Funds | No Comments »

Investing in Mutual Funds Online

Tuesday, July 22nd, 2008
James Hunt asked:


Are you thinking of investing some money? There are thousands of different mutual funds that you can start investing your money in, but the question is how do you pick the best one to fit what you are looking for? Or maybe you’re wondering if investing in mutual funds online is the right thing for you to do.

When you are setting up an account over the internet with your online broker, you must first meet three important requirements. Your computer must be able to connect to the internet, your web browser must be at least 128-bit compatible such as Netscape 3.0 or Internet Explorer 3.0 or higher, and you must have at least a small amount of money if not more to start. Some online brokers require that you have as much as $1,000 or the equivalent in securities to open an account.

When investing in mutual funds, you should check around for different accounts that may be available. Some require you to place cash up front and others may not require any cash to open the account. You should do an extensive detailed search to find an account that fits your needs as well as your bank account. Your best research tool is the World Wide Web and it is right at your finger tips 24 hours a day, seven days a week.

Investing in mutual funds online are always subject fees and this can be a tricky subject. Brokers charge fees and these can widely differ depending on the broker you choose to go with. Always read the fine print with anything dealing with money exchanging hands. There could be hidden fees or fees for changing funds that are within the same fund family. Some brokers don’t charge any fees and these may be the ones you should look into. There are websites like http://www.globefund.com that can provide you with daily, monthly and historical mutual fund data. You can also view the performance charts of a particular fund and compare funds against each other. This is an easy way to find the one that is best for you.



Tags: , ,
Posted in Mutual Funds | No Comments »