Archive for July, 2008

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

Sunday, July 20th, 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

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What are mutual funds and are they a good idea to get?

Friday, July 18th, 2008
concord4512 asked:


i wanted to know what are mutual funds? when you buy one what do you have to do. is it like a stock where you have to research and keep an eye on the stock. when getting a mutual fund what is it that you have to do before buying one.

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How do I find out which mutual funds that hold a certain stock?

Sunday, July 13th, 2008
Big Ron asked:


For example, all mutual funds that hold AT&T (T)?

Keep in mind that AT&T was just an example. I want to be able to search mutual funds based on any particular stock it may hold. Where could I search for this information?

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How to Do Mutual Funds Research to Avoid Making Costly Mistakes

Wednesday, July 9th, 2008
Muna wa Wanjiru asked:


In general research means that you are looking into a subject matter. This research can be found in all areas of interest. One area that many people are interested in is that of the stock market. With all of the stocks and bonds that are available there are times when you may not be sure which mutual funds companies are good to invest with. This is where mutual funds research can come in handy.

When you first start your mutual funds research you will need to have clear idea of your end goal. This is important as there are many factors that might have to be investigated. You may decide that the best place to start your mutual funds research is with a back knowledge of what mutual funds are. While this information is something that is needed by the average investor it is also an item that gets overlooked.

For this reason you should first look at the definition that is available for mutual funds. The next item in your mutual funds research is applying the knowledge that you have gained to the actual mutual funds. At this point select about 2 to 4 different mutual funds companies. Look to see what types of stocks and bonds they are offering.

As each of these mutual funds represents various industries, countries and companies you will find a diverse selection awaiting you. You should choose to look at a few different stock options. See in your mutual funds research how these items have preformed over a past 5 year period. You will gain an idea as to the way the market regards these items.

Next your mutual funds research should involve seeing the differences that are applicable to the fees. Since the area of mutual funds investment is very competitive there are various mutual funds companies that will have fees which are detrimental to your portfolios asset value.

These fees are mainly hidden in the type of load that is offered with the mutual fund. You will notice in your mutual funds prospectus (which you should have for each mutual fund) the type of load which has been designated for that fund. These loads are level loads, front-end loads and deferred loads. Of these many loads the best one to look for is that of a no-load fund.

In a no-load mutual fund you as the investor have no worries regarding the fees for buying and selling stocks and bonds. Your mutual funds research will reveal to that in many instances no-load mutual funds go hand in hand with index mutual funds. These funds are set to closely match the markets current prices.

By looking at all of these factors and the Morningstar reviews you can choose the mutual funds portfolio that most catches your eye. With the help of mutual funds research you now have the means at your fingertips to avoid making costly mistakes.



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How a Mutual Fund Works

Tuesday, July 8th, 2008
Justin Lukasavige asked:


I receive a lot of investing questions, and many of them have to do with mutual funds.

Mutual funds are not supposed to be confusing, but many so-called financial experts have confused us as consumers. A mutual fund is just what it sounds like… a fund that is funded mutually by many people.

A mutual fund usually has a team of managers that buy and sell stocks. The money they use comes from thousands and thousands of people who invest anywhere from $250 and up usually.

When you buy a mutual fund, you are giving your money to a specific team of managers who use it to do what is best for the fund. If you invest in Large Growth, you’re generally investing in big companies that are growing. If you invest in an International fund, you’re investing in stocks and bonds from overseas.

Many times a mutual fund can be as easy as that. Financial experts sometimes have a knack for overcomplicating things and that is where confusion enters the picture.

If you’re interested in learning more about mutual funds, check out the Morningstar Investing Classroom.



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The Many Places Where you Can Mutual Fund Quotes

Saturday, July 5th, 2008
Muna wa Wanjiru asked:


Mutual fund quotes will help you to understand the ways in which your stock portfolio can be changed for the better. You will see many different financial reviews like the Morningstar even on the internet that can provide you with the information from the day’s quotes.

To find the various mutual fund quotes you need to have an understanding of what these are really like. The way that your stock can be affected by these quotes will need to be looked at too. In the mutual fund quotes you will find lots of information that will help you in every area of your mutual funds.

You will also find the information that is provided about fees and prices that a mutual fund company charges to be very helpful. By knowing these prices you can avoid getting into lots of problems. The mutual fund quotes are constantly changing due to various fluctuations in the market. As a result of this you will not be able to find a consistent quote for each day.

There are many places where you can however receive the current information that you need about mutual fund quotes. The USA.com web site has a section where you can find the day’s quote with the least amount of trouble. To get the stock information that you need you will have to type in the stock or mutual fund name in the window which will access this information. Alternatively you can use the ticker symbol which will also display the mutual fund that you are looking for.

With these types of mutual fund quotes web sites you can find stock quotes for more than one mutual fund or stock. You will also be able to see the how a company’s family stock quotes are doing for the day. There are also various selection boxes where you have the ability of refining your search. With these boxes you can choose to get the information that you need very quickly.

For the investor who needs information about how to diversify their stock portfolio, the mutual fund quote is the best way. By accessing this information you can then choose to spend your money on the stocks that will help you in getting a good profit. The mutual fund quotes are the best way for a new investor to get up to the minute investment tips.

Use the information wisely as you will learn all of the best funds and how to make them work for you. With mutual fund quotes you have the means at hand to make your dreams of wealth come true.



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What are mutual fund loads?

Thursday, July 3rd, 2008
Michael Saville asked:


Loads are the most talked about fees that mutual funds charge. A “load” on a mutual fund is just another way of saying that the fund charges a sales commission for purchase, sale, or both. There are funds that charge loads and there are funds that do not charge loads (known as “load funds” and “no load funds” respectively).

Front-end loads are sales commissions that are paid up front at the time of your purchase. So, if you give a fund a $10,000 investment and it charges a front-end load of 5%, then the fund will take 5% of your investment (that’s $500) and pocket it right away. Only what is left over after the load has been deducted will be invested into the fund (in this example, only $9,500 is invested in the fund from your initial $10,000 investment)

Back-end loads charge their sales commissions when you sell (or “redeem”) your shares. So, when you go to redeem your shares in a fund with a back-end load you will end up receiving whatever money the shares are worth minus the sales commission.

Mutual funds charge management fees in order to pay for the management services used to run the fund. In other words, these fees are used to pay the salaries of the fund’s managers and analysts. Management fees usually do not amount to more than one percent of the fund’s assets, and they are significantly lower for passively-managed funds, such as index funds, than for actively-managed ones. You should remember that a high management fee in no way guarantees a more skilful management team.

Front loads can be reduced if you are investing or planning to invest a certain amount of money. The load reduction schedules are called “break-points.” For example, with most fund companies if you are investing over $100,000 or plan to within the next 13 months, you will get a 1% reduction on the front load. The more you invest, the greater the reduction in the load. For some fund companies the break-point reduction begins at $50,000 over 13 months, and with many funds, if you invest over $2 million there is no front load.

If you do not have $50,000 or $100,000 to invest over the next 13 months, you can still earn a reduction on the front load, through “rights of accumulation.” Under accumulation rules you will receive fee reductions on the front load when your total investments with one fund family have grown past the break points. Therefore, if you only have $20,000 to invest today, that’s OK, someday soon it will grow past the $50,000 or $100,000 initial break-point and you will be eligible for the load discount on your further investments.

The turnover ratio for a mutual fund can provide you with useful information about how expensive a fund is and how it is managed. Turnover ratios measure the amount of trading activity in the fund’s portfolio. They are calculated by taking all of the fund’s sales for a specified period of time (usually one year) and dividing by the fund’s total assets. This number tells you how much the fund’s portfolio has changed.

You probably will want to exercise caution when investing in a fund with a high turnover ratio. High turnover means that the fund’s manager is buying and selling very often, and, since every sale and every purchase involves a commission, this means that funds with high turnover ratios often have high expenses. Some experts recommend focusing on funds whose turnover ratio is less than 50%.



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Having a Stock Portfolio That is as Diverse With Fidelity Mutual Funds

Wednesday, July 2nd, 2008
Muna wa Wanjiru asked:


With so many different mutual funds in the stock market it is sometimes a little difficult to know which one to invest with. One of the more reliable mutual funds that you will find is that of Fidelity Mutual Funds. You will find there are some interesting opportunities to be gained by investing in Fidelity Mutual Funds. One of the best ways to investigate these opportunities is to contact an agent of this company and ask for information.

You can also see if there is any helpful information to be found in the internet site of Fidelity Mutual Funds. Both of these options – asking an agent for details and the internet site – will require you to do some research.

You should mainly be aware that this particular mutual funds company is open only to those people who are residing in the US. Therefore if you are interested in investing in this company from outside of the US it is wise to contact the company personally and get some confirmation about investing with Fidelity Mutual Funds.

When you look at the various stock and bond options that are available with Fidelity Mutual Funds you will discover that there are different portfolio options. These will include some of the best 4 star and 5 star rated mutual funds.

To know how the Fidelity Mutual Funds are performing you can look at the Fidelity Mutual Fund Guide. This guide has all of the information that you will need in order to make your decisions regarding investments. In this guide you will receive the latest commentaries of each funds performance. The portfolio composition, the different distributions and also the current performance trends are also discussed in this guide.

While these articles are of great help there is additional information that you can get with this guide to Fidelity Mutual Funds. In the guide you will receive historical information about the various fund portfolios for a 10 year period. This report will help clarify how the company is able to weather the various ups and downs of the stock market.

To make the various mutual funds that are available from Fidelity Mutual Funds more understandable there are in depth articles from investment analysts, portfolio managers and other mutual funds industry professionals. These many individuals have the knowledge and the expertise at navigating the murky waters of investment choosing to help you out.

This guide and other help which you will get from the managers at Fidelity Mutual Funds will allow you the freedom to choose the portfolio that is best for you. You can look forward to having a stock portfolio that is as diverse as Fidelity Mutual Funds can make it for you.



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