About the author:
Dr. Scott Brown, Ph.D., a.k.a. The Wallet Doctor, is a successful futures trader, real estate investor, and stock investor. Dr. Brown holds a Ph.D. in finance from the University of South Carolina and a Master in International Management from the prestigious American Graduate School of International Business a.k.a. Thunderbird. His 1998 articles in Technical Analysis of Stocks and Commodities were prophetic in predicting an impending stock market crash. He has helped many people become profitable investors teaching them to look out over many years to spot stocks that are low and primed for rise in the new bull market. His second article met with approval by Dr. Bob Shiller of Yale University. Dr. Shiller is the economist that Alan Greenspan most highly regards who coined the term Irrational Exuberance. In 1998 he was shouting out to the world to get out of the stock market but now he is shouting to everyone that it is time to get in! The Wallet Doctor is not only sought after for investment advice and coaching in stock investing but also in futures trading and real estate investing. He also teaches investing in Spanish and Portuguese. His free newsletter www.WalletDoctor.comis jam packed with personal finance and investment tips and advice! His course which is described in detail at www.BonanzaBase.comteaches home study stock market investment students more than an undergraduate or MBA degree in finance…how does he know? Because he is also a university finance professor!

Tags: exchange traded mutual funds, alternative energy mutual funds, off shore mutual funds, precious metals mutual funds, closed end mutual funds

ShareThis

About the author:
Dr. Scott Brown, Ph.D., a.k.a. The Wallet Doctor, is a successful futures trader, real estate investor, and stock investor. Dr. Brown holds a Ph.D. in finance from the University of South Carolina and a Master in International Management from the prestigious American Graduate School of International Business a.k.a. Thunderbird. His 1998 articles in Technical Analysis of Stocks and Commodities were prophetic in predicting an impending stock market crash. He has helped many people become profitable investors teaching them to look out over many years to spot stocks that are low and primed for rise in the new bull market. His second article met with approval by Dr. Bob Shiller of Yale University. Dr. Shiller is the economist that Alan Greenspan most highly regards who coined the term Irrational Exuberance. In 1998 he was shouting out to the world to get out of the stock market but now he is shouting to everyone that it is time to get in! The Wallet Doctor is not only sought after for investment advice and coaching in stock investing but also in futures trading and real estate investing. He also teaches investing in Spanish and Portuguese. His free newsletter www.WalletDoctor.comis jam packed with personal finance and investment tips and advice! His course which is described in detail at www.BonanzaBase.comteaches home study stock market investment students more than an undergraduate or MBA degree in finance…how does he know? Because he is also a university finance professor!

Tags: mutual funds, alternative energy mutual funds, gold mutual funds, animal friendly mutual funds, how do mutual funds work

ShareThis

As the SEC has loosened the rules on mutual funds shorting stock and investing in options, a small group of funds has emerged that invest like some hedge funds. These can be purchased by almost anyone, unlike hedge funds, which are only available to accredited investors (e.g. those with a net worth of more than one million dollars).

Appropriate use of these mutual funds can be quite effective in providing both diversification and hedging of your investment portfolio. According to the Securities and Exchange Commission, there are several types of hedge funds.

However, we will examine some of the more conservative strategies. One of these is the Long/Short fund.

Long / Short Funds:

Long/Short which includes sector and market neutral/relative value funds. These funds try to exploit perceived anomalies in the prices of securities. For example, a hedge fund may buy bonds that it believes to be underpriced and sell short bonds that it believes to be overpriced. No matter what happens to overall interest rates, as long as the spread between the two narrows, the fund profits. Conversely, if spreads widen, gains can turn quickly into losses. Long/short equity is the most frequently used strategy among hedge funds.

Arbitrage Funds:

Another of the lower risk strategies is Risk/Merger Arbitrage. These funds attempt to profit from pending merger transactions by, for example, taking a long position in the stock of the company to be acquired in a merger, leverage buyout or takeover and simultaneously taking a short position in the stock of the acquiring company.

Since these strategies are fairly conservative, they are ones that would be most appropriate in managing portfolio risk. Also, they have a low correlation to the market so some advisors see them as alternatives to bond funds in your portfolio.

Morningstar has added a category called Long/Short to its listing of mutual funds. Morningstar puts arbitrage funds into that same category as well.

There are many new entrants into this field. While there may be several of the newer funds that are excellent offerings, the most straightforward way to judge the risk management performance of these funds is to look at their history during at least some part of the most recent bear market (2000 2002).

Some example mutual funds that fared reasonably well in the last bear market include:

Merger Fund (MERFX):

This fund has been around for over 10 years. The basic approach is to capture the spread between the share price of companies that might be acquired and the proposed purchase price. This is done by buying the shares of the target firms of deals and occasionally shorting the stocks of the acquiring firm. This fund did fairly well during the bear market, although it had only fair performance in 2005.

Schwab Hedged Equity Fund (SWHIX):

A clone of its older sibling (SWHEX) that has significantly lower minimum investment, its managed by a group that has a long history of success in the small cap stock arena. The volatility of this fund is well below the market, and its returns have been good for a long/short fund.

Gateway Fund (GATEX):

This fund has been around for years. It has a unique approach of holding large cap stocks with high dividend yields and selling covered calls for extra income, while holding put options to guard against a market downturn. Once again did reasonable well in the bear market years.

Calamos Market Neutral (CVSIX):

One of the older offerings in the long/short group, it has a good track record that extends back through the 2000-2002 bear market. This fund utilizes a convertible arbitrage approach to target an 8-10% long term annual return. (This one has a sales load.)

Hussman Strategic Growth (HSGFX):

This is a hard one to categorize. John Hussman runs the fund, and buys stocks based on his valuation models, and then hedges against market risk by synthesizing a short position in a couple of the major indices with short call options. The hedge varies based on his appraisal of current market conditions. This is not your typical mutual fund, but over the last several years has had a very low drawdown, with reasonable returns.

As you can see, the universe of mutual funds that adopt the best strategies of hedge funds is increasing. These funds are a powerful tool in building a diversified, low risk portfolio, hedging away some of the market risk while keeping a reasonable return for your investments. But keep in mind that while all these fall into Morningstars category of long/short funds, they each have unique approaches to the concept of hedging. So before you invest in any of them be sure you understand the specifics of each approach to ensure it is a good fit for your portfolio.

Tags: best mutual funds, mutual funds, gold mutual funds, exchange traded mutual funds, how do mutual funds work

ShareThis

This story begins during the height of the investment madness in 2000, just prior to the bear market. I had been managing an IRA account for “Bob″ for around six years, with a better than average record of success. So I was surprised when Bob sheepishly called in July, 2000 to let me know he was transferring his IRA account, which had done particularly well during our latest Buy cycle going into the year 2000.

However, his tax preparer, a long time personal friend of Bob’s wifes, was now also offering investment services, having recently received his Registered Representatives license.

Fast forward to the end of September. It had become increasingly clear to me that the Bull market had run its course. So, in accordance with the Sell signal from our trend tracking methodology, we sold all of our mutual fund positions on October 13, 2000 and went 100% into money market. (See my article How we eluded the Bear in 2000 at http://www.successful-investment.com/articles12.htm). From our safe haven we watched the market crash and burn, causing most other investors to sustain double digit losses eventually reaching as high as 50 - 60% of their assets.

In 2002 Bob unexpectedly stopped by my office. As it turned out, things had not gone well at all with his IRA investments. As most advisors would have done, his tax preparer/advisor had quickly moved all of Bobs assets into a variety of load funds.

Of course, being newly licensed he was clueless (as were many licensed advisors) as to market behavior or analysis of any kind. The end result was that Bobs portfolio lost in excess of 50% over the next 2 years. (Not to gloat, but my clients′ losses in the same period were non-existent.)

Unfortunately, the degree of loss Bob sustained was experienced by many investors who did not follow a disciplined and methodical approach.

What I find particularly distasteful is that Bob’s tax preparer misused his position of trust. He made financial decisions that he was not qualified to make, though his license implied that he did know enough to make them. So now we know what a piece of paper is worth.

This is no different than letting a newly graduated medical student with a fresh MD behind his name perform heart surgery. Or, hiring a new MBA grad to Chief Financial Officer of a Fortune 500 company. Yet the financial services industry allows someone to get a license (after a fairly short course) and to immediately start making incredibly important and far reaching financial decisions for anyone he or she can sell their service to.

This is a worrisome trend in this industry. A CPA friend confirmed that he has been approached many times by firms wanting him to offer investment services.

Why? Its easy money! Accountants and tax professionals have a great business base. They are in a unique position of trust, because of the information their clients disclose to them. Whether they are employed by a company or they maintain an individual practice, there is probably no other person (other than your spouse) who knows as many intimate details of your financial life as your accountant ax preparer.

To abuse this trust for personal gainno matter how noble the motive may appearis a total conflict of interest and a huge betrayal.

The bear market of 2000 has shown that investing must be a disciplined endeavor. Even most professionals have failed to recognize this. What busy accountant, in the middle of tax season, can put the necessary time and attention to a volatile investment market that may require action at a moment’s notice?

As for Bob, hes still with his accountant, and in the same investments that brought his portfolio down. Hes hoping for a miracle recovery. As of this writing, the stock market is engaged in something of an upswing and Bob, I’m sure, is getting his hopes up that he will recover some of his losses. However, I shudder to think that this rally may come to an end and the bear market resumes. Where will Bob be then?

At 58 years old Bob is still playing Russian roulette with his retirement. He’s apparently unable to make a decision to move to someone who has the ability to make sense of market trends and the discipline to follow the signals they communicate. This is a decision that will have a profound affect on his financial futureand will determine whether his story has a happy or sad ending.

This story begins during the height of the investment madness in 2000, just prior to the bear market. I had been managing an IRA account for “Bob” for around six years, with a better than average record of success. So I was surprised when Bob sheepishly called in July, 2000 to let me know he was transferring his IRA account, which had done particularly well during our latest Buy cycle going into the year 2000.

However, his tax preparer, a long time personal friend of Bob’s wifes, was now also offering investment services, having recently received his Registered Representatives license.

Fast forward to the end of September. It had become increasingly clear to me that the Bull market had run its course. So, in accordance with the Sell signal from our trend tracking methodology, we sold all of our mutual fund positions on October 13, 2000 and went 100% into money market. (See my article How we eluded the Bear in 2000 at http://www.successful-investment.com/articles12.htm). From our safe haven we watched the market crash and burn, causing most other investors to sustain double digit losses eventually reaching as high as 50 - 60% of their assets.

In 2002 Bob unexpectedly stopped by my office. As it turned out, things had not gone well at all with his IRA investments. As most advisors would have done, his tax preparer/advisor had quickly moved all of Bobs assets into a variety of load funds.

Of course, being newly licensed he was clueless (as were many licensed advisors) as to market behavior or analysis of any kind. The end result was that Bobs portfolio lost in excess of 50% over the next 2 years. (Not to gloat, but my clients’ losses in the same period were non-existent.)

Unfortunately, the degree of loss Bob sustained was experienced by many investors who did not follow a disciplined and methodical approach.

What I find particularly distasteful is that Bob’s tax preparer misused his position of trust. He made financial decisions that he was not qualified to make, though his license implied that he did know enough to make them. So now we know what a piece of paper is worth.

This is no different than letting a newly graduated medical student with a fresh MD behind his name perform heart surgery. Or, hiring a new MBA grad to Chief Financial Officer of a Fortune 500 company. Yet the financial services industry allows someone to get a license (after a fairly short course) and to immediately start making incredibly important and far reaching financial decisions for anyone he or she can sell their service to.

This is a worrisome trend in this industry. A CPA friend confirmed that he has been approached many times by firms wanting him to offer investment services.

Why? Its easy money! Accountants and tax professionals have a great business base. They are in a unique position of trust, because of the information their clients disclose to them. Whether they are employed by a company or they maintain an individual practice, there is probably no other person (other than your spouse) who knows as many intimate details of your financial life as your accountant ax preparer.

To abuse this trust for personal gainno matter how noble the motive may appearis a total conflict of interest and a huge betrayal.

The bear market of 2000 has shown that investing must be a disciplined endeavor. Even most professionals have failed to recognize this. What busy accountant, in the middle of tax season, can put the necessary time and attention to a volatile investment market that may require action at a moment’s notice?

As for Bob, hes still with his accountant, and in the same investments that brought his portfolio down. Hes hoping for a miracle recovery. As of this writing, the stock market is engaged in something of an upswing and Bob, I’m sure, is getting his hopes up that he will recover some of his losses. However, I shudder to think that this rally may come to an end and the bear market resumes. Where will Bob be then?

At 58 years old Bob is still playing Russian roulette with his retirement. He’s apparently unable to make a decision to move to someone who has the ability to make sense of market trends and the discipline to follow the signals they communicate. This is a decision that will have a profound affect on his financial futureand will determine whether his story has a happy or sad ending.

ABOUT THE AUTHOR

Tags: exchange traded mutual funds, mutual funds, closed end mutual funds, gold mutual funds, precious metals mutual funds

ShareThis

There are more than 13500 different publicly traded companies in the world today, and there are over 700 more companies expected to go public within a year. In addition, every major developed country offers investors various bonds to invest in. All of this makes for a lot of different investments and plenty of choice. Investors can take advantage of this choice through a good global balanced fund that invests in bonds and stocks or a global equity fund that invests in stocks all around the world.

A global equity fund invests in stock markets around the world. These funds will have a portion of their investments invested in North America. Europe, and Asia. Some of these funds will own hundreds of securities in order to participate in the growth prospects of many firms while diversifying the risk associated with investing in different companies. A good global equity fund will be a foundation for a well-diversified mutual fund portfolio for almost any investor. Investors could consider including the AGF International Value Fund, the BPI Global Equity Fund, or the Fidelity International Portfolio Fund in their portfolios.

A global balanced fund is a fund that invests in both stock and bond markets around the world. These funds will also always have a portion of their investments invested in stock and bond markets located in North America, Europe, and Asia. They are more conservative than global equity funds because they invest in a combination of stocks and bonds, which affect the fund’s performance. Over the long term these funds will provide a lower rate of return for investors but they will also exhibit a lot less risk than a global equity fund. They exhibit less risk because bonds are less volatile than stocks; they do not decline in value to the same magnitude or at the same time as global equity funds. A conservative investor should find a good global balanced fund that will serve as a good foundation for a diversified portfolio.

About the Author

Tony Reed is the author of ” Going global through mutual funds“, please visit his website Mutual Funds & Stock Trading for more information.

Tags: off shore mutual funds, alternative energy mutual funds, closed end mutual funds, online mutual funds, precious metals mutual funds

ShareThis

The first advantage of mutual fund investing it that mutual funds offer professional management of your investment dollars. Mutual funds are run by fund managers, who are essentially watching over your investment daily. There is almost no other place where you get that kind of investment management without paying huge management fees.

The second advantage of mutual fund investing is that mutual funds are extremely liquid. Any investor can sell his shares in a mutual fund any day that the stock market is open. Compare that to investing in real estate, CDs or even stocks that have low trading volume which can takes weeks to months to liquidate your stake. The liquidity of mutual funds gives any investor the ability to get out of the investment quickly if needed.

The third advantage of mutual funds is the diversification that they offer. Mutual funds invest in tens or even hundreds of different stocks, bonds or money markets. Trying to duplicate this type of diversification in your own portfolio would result in very high trading fees, not to mention huge headaches from tying to monitor hundreds of stock positions. This leads us into the fourth advantage of mutual funds, lower fees.

Mutual funds have very low fees due to their ability to take advantage of economies of scale. Since mutual funds are pooling the investment dollars of so many investors they can buy stocks in larger quantities which leads to lower fees for mutual funds investors. Numerous mutual funds have fees that are under 2 or 3%.

Mutual funds are growing at a feverish pace as more and more investors put their money in them. But considering the great advantages that mutual funds offer the average investor all the way up to guy with the multi-million dollar portfolio, it?s really no surprise.

Tags: how do mutual funds work, precious metals mutual funds, best mutual funds, off shore mutual funds, mutual funds

ShareThis

1. Define your goals
Are you trying to aggressively make money? Or do you want steady growth? How soon will you be pulling your money out? Generally, if you will not be touching the money for a long time, you can afford to invest in relatively aggressive funds. If, on the other hand, you will be retiring in 5 years, a conservative fund may make more sense. So it?s crucial to understand your investment goals before selecting a fund.

2. Analyze past performance and mutual fund manager
By going to Yahoo mutual fund center, you can easily look at the performance record of any fund you are considering investing in. Only the best mutual funds will beat the S&P 500 index on a consistent basis. Most do not. This means that unless you can find a fund that outperforms the S&P 500 consistently, you are better off just putting your money in an Index fund or ETF (more on this later). The exception to this would be if you are looking for a really steady investment that offers less in returns but more safety.

When searching for the best mutual funds, make sure the past performance in question is connected to the current mutual fund manager. Even if a fund has done great in the past, if they have a new manager, then you should not assume the fund will be managed similarly in the future or attain similar returns.

One final thing you should be aware of is that mutual funds are tracked and rated by many organizations. The most well-known organization rating mutual funds is Morning Star, which rates funds using a star system, with 5-stars reserved for the best mutual funds. Yahoo Mutual Fund Center shows you the Morning Star ratings of all funds. Only select 5-star funds.

3. Don?t overlook ETFs or Index Funds
An Index fund is a fund that simply mirrors the performance of a major index such as the S&P 500. Why would you want to consider such a fund? Quite simply, because it has been shown historically that very few mutual funds consistently beat the market index. This had lead some investors to simplify their investments and just buy index funds instead of constantly hunting for the best mutual funds. Buying index funds may be a boring strategy, but it?s pretty safe and the returns are decent.

Another option is something called an exchange traded fund (ETF) which trades exactly like a stock. ETFs also track indexes like the S&P 500 as well as numerous other indexes such as the Russel 2000, Nasdaq, Dow Jones, as well as sector-specific indexes. ETFs also have much lower fees than mutual funds, and have quite a few built-in tax advantages that you won?t get even with the best mutual funds. This won?t matter if you are investing with IRA money, but otherwise, ETFs are definitely worth a look.

Tags: online mutual funds, gold mutual funds, exchange traded mutual funds, off shore mutual funds, mutual funds

ShareThis

You are looking for another type of retirement investment that provides a higher annual return and you want to exercise caution. Your goal is to maintain a comfortable life style whether the market goes up or the market goes down.

A excellent IRA investment option is a Mutual Fund ? the common name for an open-end investment company. Like other types of investment companies, mutual funds pool money from many investors and invest the money in stocks, bonds, short-term money-market instruments, or other securities. Mutual funds issue redeemable shares that investors purchase directly from the fund or through a broker for the fund. As an IRA investment in your portfolio, you want a mutual fund to meet certain conditions such as:

1) Return over long-term (5 years) should be above the average certificate of deposit yields. An example would be a mutual fund that provided 35% or 7% average for 2002 through 2006. There is no guarantee of past performance but it can help you assess the fund’s volatility.

2) Risk has to be minimal. The risk ratings of mutual funds ranges are low, below- average, average, above-average, or high. Risk is a standard deviation of the return on total investment.

3) Distribution the mutual fund gives its shareholders income and/or capital gains. All distribution should be reinvested and thereby increasing the number of shares owned. Taking this action enables you not to be taxed for the income or capital gains received. You acquire shares of the mutual fund at a lower net asset value price (the share price is reduced by the amount of distribution).

4) Total Expense ratio should be low or should not exceed the average of other mutual funds serving the investment classification. The total expense ratio is the fund’s total annual operating expenses which includes management fees, distribution (12b-1) fees, and other expenses is expressed as a percentage of average net assets.

On September 15, 2006, Mutual Interest Data Service created a mutual funds model and hypothetically invested $10,000 four mutual funds.

The objective for the investment was: 1) achieve performance growth, 2) increase the shares owned, 3) minimize the risk, and 4) maintain a comfortable lifestyle in all market conditions whether the markets up or the markets down.

? $2,000.00 (114.92 shares) Balanced

? $2,500.00 (89.22 shares) Equity Income

? $2,500.00 (139.60 shares) Multi-Cap Core

? $3,000.00 (20.19shares) Specialty Health

? $9,843.08 (-1.56%)total portfolio investment purchased after initial fees.

As of March 30, 2007, the total accumulated (distribution of income and capital gains and performance) return on these funds is $10,657.67 +6.58%. If distribution was not received and reinvested, the total return would be $10,144.85 +1.44%.

Mutual funds are not guaranteed or insured by the FDIC or any other government agency ? even if you buy through a bank and the fund carries the bank’s name. There is no guarantee for past performance. Always contact the mutual fund and read the prospectus before making any investment.

Tags: gold mutual funds, how do mutual funds work, no load mutual funds, closed end mutual funds, online mutual funds

ShareThis

Investing in mutual funds is a relatively safe way of growing your net worth, but such investments are not entirely free of risks. Before you pick on any particular mutual fund for investment you should watch out for a few things.

Performance

The first thing you should look for is whether the mutual fund you are planning to invest in is outperforming or under-performing with respect to the market. Good and safe mutual funds are those that consistently outperform the market. Changes in the net asset values (NAVs) of such mutual funds are consistently one step ahead of the market. For example, if the index that measures market movements goes up, the NAV of most good and safe mutual funds will also move up at least as much as the market or even more than the market. On the other hand, when the market moves southwards, the NAV of most good and safe mutual funds will move down but such depreciation will be less than or at the most equal to the market’s downward movement. Unsafe or risky mutual funds are those where the opposite occurs - when the market moves up, the NAV of risky or unsafe mutual funds may move up less than the market and may even move down despite a bull run in the market. Such under-performing mutual funds should always be eschewed when taking an investment decision.

Churn and earn

The next thing to watch out for is whether the mutual fund is undergoing too much “churn and earn″. This means you have to check whether too many transactions by the mutual fund are resulting in higher fees or costs to the investor. In this context, the worst offenders are those mutual funds that have a lot of spurious churn. Every time a mutual fund buys or sells stocks, the broker or brokers it employs make a neat pile from the commissions. So, these brokers try to encourage a lot of churn or buying and selling of stocks by giving a kickback to the mutual fund manager. Although direct bribery is illegal, payment of soft money through a sponsored trip to Hawaii or letting the mutual fund manager have a swanky Wall Street office for $1 a month is not. The only loser in all this spurious churn is the investor, especially in cases where the small print says that the investor will have to pay the brokers’ fees as well.

Lack of clarity

Mutual Funds that have prospectus, annual reports or statements of additional information written in such a way that they are difficult to understand should also be avoided. The lack of clarity in their documents is almost a sure sign of lack of honesty in their dealings or a lack of competency in managing funds - both of which are strong reasons for avoiding them for investment purposes.

Risky and unsafe mutual funds are also characterised by having too many restrictions on how and when investors can sell or redeem their mutual fund shares. Mutual funds that have too long lock-in periods or those which slap a hefty exit load at the time of redemption should be eyed with suspicion and are likely to prove to be unsafe and risky.

Beware of scams

Finally, there are mutual funds that are outright scams. There have been reports of fund mangers selling stocks at prices other than what has been reported to the investor. For example, the fund manager may have sold stock at prices that prevailed before closing of the day’s trade although the investor is told that the transaction took place at closing prices which were lower. The manager then pockets the difference and with most such transactions involving large volumes, even a fractional price difference can lead to substantial gains for the manger. Again the only loser in all this is the investor who gets short-changed by the mutual fund operator!

About the Author

Jason Hanson recommends you contact the Law Firm of Richardson, Patrick, Westbrook, and Brickman if you need a mutual funds attorney.

Tags: no load mutual funds, how do mutual funds work, exchange traded mutual funds, closed end mutual funds, online mutual funds

ShareThis

What are Mutual funds?

A company dealing in mutual funds invests the money of several investors in bonds, stocks, securities, assets and several other short-term money-market instruments. The combined ?holdings? owned by the mutual fund are known as its portfolio. When you invest in a mutual fund you become a shareholder of the company. Each share in a mutual fund company is the representation of he investor?s proportionate ownership of the fund holdings and the income generated. You earn dividends when the mutual fund company earns a profit, however, your shares will decrease in value if it faces a loss. A professional investment manager does the buying and selling of securities for the growth of the fund.

Types of mutual funds:

Equity funds: These funds involve only common stock investments. They can earn a lot of profit, but are also very risky.

Fixed income funds: They include corporate and government securities. These funds offer fixed returns at a low risk.

Balanced funds: This is the combination of bonds and stocks with a low risk. However, the investment does not earn a lot through these funds.

How it works?

Mutual fund shares can be purchased from the company itself or a broker. There are secondary market investors also, like the New York Stock Exchange. Per share net asset value of the funds or NAV is the price that you pay for buying a mutual fund share. It also includes the shareholder fee that is imposed by the fund, at time of purchase. The best feature of mutual funds is that these shares are ?redeemable?. You, as an investor, can sell your shares back to the broker. In order to accommodate new investors, mutual fund companies generally create new shares and sell them. They keep selling their shares continuously till they become large. Investment advisers act as separate entities and are responsible for managing the investment portfolio of the mutual funds. Investing in mutual funds tends to lower the risk factor because they are the result of diverse investments. Since someone else manages your investments, you need not worry about keeping constant tabs on the investment, though a periodical check enhances your personal book of accounts. Managing funds is the full time job of the fund manager and he is responsible for the performance and health of the investment.

The rate of returns in mutual funds is based on the increase or decrease of the value, during a specific period. Returns of a fund indicate the track record. It is important to remember that the past performance cannot guarantee future results.

As in the case of any investment or business, mutual funds also have risks associated with the returns. It is essential to set your financial goals and requirements, before investing in a mutual fund.

Tags: exchange traded mutual funds, animal friendly mutual funds, online mutual funds, closed end mutual funds, gold mutual funds

ShareThis