Money: Mutual Funds

Mutual Fund Information

Getting good mutual fund information is the first step in investing in mutual funds. Mutual funds are great investment tools. The money from investors gets pooled and invested in a combination of stocks, bonds, commodities, and cash investment strategies. If you find a mutual fund company that does it you can even invest in companies overseas without even blinking an eye.

Why? Because the fund manager does it for you. All you have to do is your initial homework to find the fund or funds you want to invest in and then let the fund manager take over. Now, you are not going to blindly hand over your money to some stranger, right? Right. So, when you find a fund you are interested in then send away for the prospectus. Read it over carefully and if there is something you do not understand then call them for an explanation.

Make sure you know and understand everything about the fund before you decide to put your hard earned cash down on the table. This should just be common sense but I have seen some perfectly sane people do some pretty dumb things before so listen up on this one. You are considering a mutual fund to make some money, not throw it away or lose it to some scheister.

One great piece of mutual fund information is the fact that you can get into a mutual fund for $100 or less. I think the first mutual fund I invested in was only $50 to get it started then $50 a month or less afterward. You can even have them take the money right out of your checking account as an electronic debit transaction so you can keep adding to your mutual fund.

Mutual funds are great because they allow you to invest your money relatively safely and automatically diversify your holdings. You will not have daily access to the numbers but you will receive a quarterly or yearly report depending on how often the fund manager sends them out.

In learning all you can about the mutual fund company you wish to deal with, find out about how you will make your money. Dividends may get put right back into the fund or may be distributed to you directly. Then it is your choice how to proceed, keep it or reinvest it. Capital gains, long term gains and short term gains, and price appreciation are also other ways for you to make your money.

You may be subject to paying taxes on any capital gains that you receive from your mutual fund so be prepared for this. Other charges may be imposed on your account so make sure you have all the mutual fund information like costs, investment strategy and tax implications before you invest. Mutual funds can be a great way to increase your retirement portfolio but be careful when choosing a company to work with. Mutual funds are not guaranteed by the FDIC so money lost is money lost.

Selling Mutual Funds

So, you have got this mutual fund and it has not been performing like you thought it would and now you need to find all the information you can about selling mutual funds. Just for starters you need to understand some basic tactics.

The first thing you should do is get in touch with your broker, or whomever you bought the mutual fund from in the first place. They should be able to help you sell it. They will ask you if you want to sell for net or gross. Selling for net means you will have to authorize the selling of more of the fund so you get the correct amount of money from the sale and all the fees get paid.

If you sell for gross then the whole thing is sold and you take less money because the fees are taken out after the sale. If you took on a broker after you bought this particular fund then he or she cannot be the seller of this particular fund. You will have to go to the place you originally bought it from to place your order to sell. If you bought the mutual fund online then go there again to sell it.

Don’t worry about using the right lingo when selling mutual funds, every broker or mutual fund manager knows the words buy or sell. When they ask you how much money you need from the sale then that will tell them whether you need to sell for net or for gross. Either way it doesn’t really matter, you get your money either way just one way gets you just a little less cash in your pocket, is all.

Online selling may be a bit more involved because you have no one interceding on your behalf. You will need to do all the work for yourself. You might think that it would be as simple as just pushing a button but you will need to select several options like net or gross or sell by shares or dollars. There may not be a selection for you to sell all so therefore you will have to manually enter the number of shares your mutual fund has in it to sell the whole thing.

Whether you are selling online or having your broker do it, you will have to choose how you would like to receive your money. You can choose to have the money placed in your brokerage account, if you have one, or direct deposited into your bank account if you have that option already set in place or you can just opt to receive a check in the mail. Wire transfers used to be fairly popular but they are spendy and are not used so much anymore but if you need the money, like, yesterday then a wire transfer may be another option for you if the company agrees. The fee for the wire transfer may come out of the amount of money you are getting.

This is the most basic information you need when selling mutual funds. There may be some more finer points that you need to know but you will find those out on your own when you are in the process of getting you mutual fund sold.

Top 100 Mutual Funds

How do you find out which are the top 100 mutual funds? You can talk to your financial advisor or do some research online. These are probably your best options but be careful. Whoever you talk to may just have an agenda and skew the results of their top 100 list in their direction because they have something to gain from steering you in that direction.

You can make your own list of the top 100 mutual funds if you have the time and the inclination. First, though, make a list of what interests you and then find mutual funds that match your interests. To make this a little easier you can join a trading site and maybe get to research stocks and mutual funds for no extra charge.

The top 100 list will be different to if you are looking for domestic funds or international funds. Maybe you do not even know what will pique your interest so what then? Well, my advice would be to talk to someone who knows the business. (Hopefully they won’t give you the business when they realize you don’t know anything about investing.)

Many websites post a lot of information about a lot of different stocks and mutual funds and things might get a little confusing. Make some notes and keep them handy when you talk to a financial advisor. Also, take notes on what you learn from the financial advisor so you do not get more confused when you get home.

Learn what you can so you can make your financial future and retirement a good thing and not have to worry about how much money you have or don’t have. You want to be able to do what you want to do when you want to do it. You will have worked for your entire life to reach your retirement and you want to have everything in good shape when you get there. In order to do this you must make good decisions now regarding your mutual fund investments.

There is a lot to know and understand and one of these aspects is categories. There may be different categories of stocks or mutual funds that you can research, too. Categories like diversified, small/midsized diversified and specialized to name just a few. It is important to keep everything straight in your notes and in your head. If confusion takes over you may just give up the ghost and forget about investing all together.

Different companies rate stocks and mutual funds differently so one company’s top 100 may not be the same as the next company’s top 100. Be as discerning as you can when considering the lists of multiple companies and take into consideration that they may have that agenda we spoke of earlier.

You are the best judge of what you want and don’t want when it comes to your investments but if you need some help, ask a professional financial planner to unscramble some of the particulars of the top 100 mutual funds out there so you can keep that full head of hair.

Silver Mutual Funds

Silver, like gold, basically offers the investor a hedge against what the stock market is actually doing. Precious metals can tend to go the opposite direction of the stock market because they stay strong in a down-turned economy. Silver mutual funds are a great way to invest.

Some may prefer to own the actual precious metal like silver pieces or gold bars but if you do not have an extremely safe place to keep the precious metal then a better idea would be to invest in silver mutual funds. You may just love the idea of owning the actual metal and if so then great have fun but if you would rather play it safe then invest in the precious metal industry by buying into mutual funds.

Precious metal mutual funds do not necessarily invest in things that are made with the precious metal but they invest in the companies that actually do the mining. Most invest in the big picture of precious metals and invest in all aspects of silver from the actual mining to the production and design of jewelry made from the precious metal.

If this interests you, start with doing some homework. Study up on precious metals and find out all you can about where they mine silver or gold or whatever the precious metal is that you are interested in. Get yourself a good, solid background before deciding to invest so you know what you are getting into. Follow some precious metal all the way from the mine to the jewelry store. Finding out what that final product like that silver ring you have on your finger goes through to finally get to your finger.

Research precious metal mutual funds online, also, this will give you a new perspective on mutual funds in general and how you go about investing in them. When you find one, or some, you like then call or send away for their prospectus and read it over carefully when you receive it.

If you do your homework the you should be able to put together a very diversified portfolio and not get diworsified. Once you have made your decision about what mutual funds you want in your portfolio then it would be a great idea to talk things over with a financial expert. They can tell you if you have over-diversified or diworsified as the case may be. You want your portfolio to be streamlined and somewhat predictable. If predictable can even be used when talking about the stock market.

You do not want to invest in too much of the same type of stocks or mutual funds because this will just increase your risk of loss in a volatile marketplace. Do not invest only in precious metal mutual funds either. The precious metals sector can be a volatile sector but still can be more stable than other sectors like the technology or energy sectors. Silver mutual funds can provide you with the diversification you need in your investment portfolio.

Compare Mutual Fund

Where do you turn when you are looking to compare mutual fund information? Investing in mutual funds is a great way to increase your net worth and secure a worry-free financial future. Before you can invest, though, you must find mutual funds that interest you.

Maybe you have some type of stocks and mutual funds already in mind. You have been told that mutual funds are a great way to diversify your portfolio and have also been told that there is a certain way to diversify so you don’t overlap single stocks and funds. Doing this can cause a very volatile situation and increase your risk.

Like most people you are probably risk averse so you want to be as diversified as you can be to minimize the risk involved. You will not be able to eliminate all risk but if you can lessen it dramatically then so much the better.

To choose the right mutual fund for your portfolio you will need to compare mutual fund information apples to apples. You will also want to make sure you keep the same diversification when adding a new mutual fund to your holdings.

In order to get the best information, send away for the prospectuses of the mutual funds you are interested in. Read them over carefully and make note of any questions you have on things that do not make sense.

Research the objectives and goals the fund has. Kind of like a mission statement of a company. This will tell you what the mutual fund is all about. Note the direction the mutual fund is taking and what sector or sectors it will invest in. sometimes there are restrictions as to where the fund can go and what types of stocks it can invest in.

For example, the mutual fund you choose may have some restrictions about investing internationally. If international investing does take place the fund manager may be required to inform you about it’s intentions.

If the goal of the mutual fund you have chosen is capital appreciation then the risk factor may be higher than one with capital preservation as it’s primary goal. Depending on how risk averse you are and how much money you are prepared to lose capital appreciation may be the way for you to go. If you are older and closer to retirement then capital preservation is best for you.

Make sure you are well versed in what fees or expenses are involved with the mutual fund you want to invest in. This number very well may be the deciding factor whether you invest in one fund or the other. You want most of your money going toward your retirement and financial security not lining someone else’s pockets.

There are quite a few aspects you need to keep in mind when you compare funds. Ideally, you want the fund with the lowest fees, commissions, and expense ratios and the highest return rates. Do not forget, if you employ the knowledge of a fund manager, (not a bad idea by the way), and have your choice of them you can usually bet that the one that has been at it the longest will give you the best advice when comparing mutual fund information.

REIT Mutual Funds

If you have been thinking about investing in real estate but do not like the idea of managing actual properties then real estate investment trusts or REIT mutual funds would be perfect for you. You can hold shares in commercial or residential real estate and never have to hassle with collecting the rents or having to maintain the properties. You can research these funds online then send away for the prospectus for each one that interests you but then call and talk to a financial advisor to get your questions answered.

To understand how REIT funds work, the best thing you can do for yourself is to talk to a financial advisor so you make the best investment decisions based on your retirement needs. REIT funds do not pay corporate income taxes and for this privilege they are required to disperse 90% of their profits to their investors in the form of dividends. Dividends can be used to increase your holdings in your portfolio or you can invest in other ways with the money you get.

There are two REIT mutual funds investment styles you should concern yourself with: Actively managed REIT funds and passively managed REIT funds.

Actively managed REIT funds buy and sell shares of real estate throughout the year according to an investment strategy based on research of the market. Due to all the buying and selling going on actively managed REIT funds naturally incur higher maintenance fees and higher expense ratios. Expense ratios on actively managed REIT funds are typically over 1%.

Passively managed REIT funds buy and hold shares according to a REIT index so very little buying and selling takes place throughout the year. Conversely, passively managed REIT funds have lower maintenance fees and expense ratios due to the fact that once the shares are purchased they are held long term. Expense ratios can be as low as 0.26%.

Redemption fees are something else you need to ask your financial advisor about. Redemption fees are charged to discourage investors from selling their shares often. Not all REIT fund managers charge redemption fees but the ones that do charge up to 1% if you hold your shares for less than a year.

You know that diversification is key when having a balanced portfolio. You and your financial advisor should plan on allocating 10 to 20 percent of you total holdings to REIT funds. While real estate can make you a lot of money, it is still a very tight market and should not be over invested in. Your portfolio should reflect this. Your financial advisor should ensure you are well diversified to minimize risk and loss.

There are also different types of accounts to hold your REIT fund in. Some pay out dividends that can be reinvested and won’t have tax implications and some pay out dividends quarterly. These accounts will have tax implications and you will have to report your capital gains on your tax return.

REIT mutual funds that hold these shares provide the diversification and income stability you need to secure your financial future.

Best Mutual Fund Companies

Looking for the best mutual fund companies? Well, if so, keep reading. There are some things that you can look for when evaluating the strengths of one company over another. But, at the end of the day, everyone is different and everyone has different needs so the best mutual fund for you is not necessarily going to be the best mutual fund for your friend, relative, etc.

Here are a few tips that you can keep in mind as you look through the various options for your investment needs:

1. First of all, and the most obvious thing to think about, is what are your needs, wants and goals? What do you hope to accomplish with your mutual fund? Are you saving for retirement, a college education, or a vacation home? Whatever it is, how long do you have before you need to have the money ready? If you are in your 20’s and are saving for retirement you have a long time and that will play a big part in the types of investments you choose.

The length of time you have will also be a component in how aggressively you invest. Everyone has their own risk tolerance. Some people like to play things close to the edge and are willing to take big risks in order to get big rewards. This is an easy strategy if you are young and you have a lot of time to recoup any potential losses.

Other’s simply can’t sleep at night if they think they are at too much risk of losing their investment. For them, a more conservative approach is the way to go. Many times older investors (those that have less time to recoup any possible losses) will choose a less aggressive approach to investing.

Just figure out which one of these categories you belong in and you can go from there. This one decision will really have a big impact on your investment strategies.

2. Once you’ve got your investment risk tolerance figured out you can start getting ideas of some potential best mutual fund companies to invest in. there are tons of websites online where you can go to find the information you need on mutual funds (you can also look in financial magazines to get some ideas). Don’t just check out one or two either, check out a dozen or two to really get a feel for what is available.

3. Narrow your list down to those funds that have a high performance rating over the last 3, 5 and 10 years. There is never a guarantee with an investment but the better the fund has performed over the last years, the higher the likelihood it will perform in a similar way if you were to invest in it.

If you are just starting out on your investing career, you have a lot of questions. The more knowledgeable you are the better your decisions and results will likely be. Use these tips to locate the best mutual fund companies you can find. Working with the best will help you get the best results… and that is the whole point, isn’t it?

Balanced Mutual Fund

What is the definition of a balanced mutual fund? A mutual fund that is considered balanced traditionally are a combination of stocks, bonds, and cash holdings. The goal being not only creating an income stream but capital conservation and capital appreciation.

Not too many people use the termed balanced any more though, it is a bit old school. The current terminology is asset allocation.

A good mutual fund will allow you to easily diversify your money by holding the stocks and bonds already mentioned but also across different sectors of these holdings and even in many different countries. I would imagine if you want to you could try to put your own mutual fund together but I am equally sure that there are some out there that have what you want already put together so give yourself a break and take the shortcut.

A balanced mutual fund portfolio should encompass a few different funds with multiple investment objectives addressed. Some mutual funds do this automatically so you will not need to direct the fund manager to do this for you. There are so many different combinations available that to try to understand them all will literally make your head spin.

Do your research and find a couple that you are interested in and call to have them send you their prospectus. If you do not understand the terminology then find someone to explain it to you. You cannot go off half-cocked when it comes to planning your future. If you do not know something then ask.

Once you have understood the prospectus then you can make a better informed decision regarding how you want to proceed. Some things to consider in your decision making process is the percentages the mutual fund uses. 50/50 is a good percentage.

All you have to do once you have made your decision is to plunk down the money. The mutual fund manager handles the rest for you. By handling the purchase of the stocks and bonds and other holdings the ratios stay intact and you can just sit back and watch it grow.

Like I said the term balanced isn’t always used anymore so keep your eyes open and realize that the terms asset allocation, blend or even a year number are often used these days. A fund using a year number will usually have more bonds than stocks and the closer the year gets to the year on the fund then the better it will perform. Do not take what I say as Gospel either, Do your research then make your decision.

Keep in mind that even though you have a balanced mutual fund that it can’t suffer losses or that it will be less volatile than other stocks. This is just not true, you can suffer the same fate as other more risky stock ventures. One way to combat this is to invest in several different types of mutual funds, some risky and some more conservative to reduce your risk.

Sector Mutual Funds

Sector mutual funds are funds that allow you to invest in companies within a single sector. There are all kinds of sector funds available so all you have to do is pick one or more that piques your interest. Sector funds are an important addition to your portfolio to stay more diversified.

You can pick from hundreds of tech stocks or energy stocks as your sector. There are also subsectors within those sectors. Now do not let all this confuse you, a good broker who is worth their salt can keep things straight for you and explain any aspect that is confusing.

You haver been told that to be diversified in your portfolio is important but have you been told that if you invest in sector mutual funds and regular mutual funds there may be some overlap that could possibly increase your risk for loss. A good idea to minimize this chance is to combine an energy fund with a subsector fund like wind turbine energy.

Sector funds are also a good way to close any gaps you may have in your portfolio so you have all the bases covered. They can be used to capture growth in the area of choice. Just like when the stock market bottomed out a few years ago and the car companies stocks were very low. If you had a sector fund with car company stocks as the sector then you could have made a killing when the prices of the stocks started to rise.

Because they are so specific, sector funds are considered riskier and more volatile then regular mutual funds. You may want to limit the amount of sector funds just because of this. Every sector behaves differently at any time due to the ever changing economic indicators. Some sectors have been known to have higher highs and lower lows than some broad spectrum mutual funds and subsectors can be even more volatile. Sector funds have such a high turnover rate that you need to be tax conscious. The high turnover rate is an indicator that the fund buys and sells assets within the fund.

You need to keep in mind any and all tax implications of your very volatile sector funds. If you make some money and take it in payment then you will be taxed at the current capital gains tax rate which is about 15%. If you should lose money then of course you can deduct the loss as well.

You can also minimize your risk by considering sector spider funds or exchange traded funds. Both of these funds trade just like stock on the open stock market but offer the diversification of a sector fund. Spiders and ETFs have lower expense ratios and also have more investment options like short sales.

Always consult your financial advisor and get their advice on sector mutual funds. The two of you can go over your portfolio to see where there is lack and what type of sector fund is needed to fill any gaps in diversification and help with a suitable investment strategy to minimize your risk.

Stock Market Mutual Funds

If you are interested in investing in the stock market mutual funds are a great way to get your feet wet. You can invest in mutual funds with very little money to start. Sometimes as little as $50 to $100 will get your foot in the door. Then all you have to do is just invest a little each month to keep your account growing.

The old adage, “It takes money to make money”, is not quite the truth when it comes to beginning investing in the stock market mutual funds are the exception. Mutual funds allow first time investors a chance to make some money by pooling their money and having the fund manager do the buying and selling within the fund.

Buying into mutual funds can be a way to lessen your risk when learning to invest. One of the first things to do is to research mutual funds online and then talk to someone who knows their stuff either over the phone or in person. You should send away for the prospectus of any fund you think you are interested in. The professional advisor you choose should be able to answer any and all questions you have regarding the funds that interest you.

You may be required to open a brokerage account especially if you wish to include single stock purchases in your portfolio. When you buy stock you essentially own a piece of that company and with that stock now earn money when that company earns money. sounds easy right? Sure does. But, that is not always how it works, sometimes you lose money as well.

Mutual funds are the best way to buy shares of stock and they may pay small dividends that you can reinvest into the fund and increase your holdings. The main objective here is to buy the right stuff and make money over time.

Advantages of investing in mutual funds are you get to basically invest in many different companies all at once. This is called diversification and is very important to minimize the risk involved in investing. Being diversified means you can be secure in your decision to invest. Stability is key and if you remain invested in mutual funds that are less volatile then you can invest and then not give your investment much thought.

Mutual funds can be started with very little money because when shares are lumped together in a fund situation then they do not cost as much as when you buy single shares of stock. This is why mutual funds are so popular.

There is also an aspect of mutual funds that is a disadvantage called diworsification. Diworsification means you own several different funds that all have the same objective. This usually happens when you are uninformed and do not have a professional financial advisor to help you. The scales tip all in one direction and you lose the advantage of being well diversified and your risk increases dramatically.

Do not think that just because you hand over some money to someone to buy you shares in stock market mutual funds that the cost ends there. You will be charged management fees by the fund manager to manage your fund.