Congratulations to you both on your inheritance and taking your first step towards investing for your future. When talking about investing in stocks, bonds, mutual funds and etc.., there are so many options and each has its advantages and disadvantages. Keep in mind that your current circumstances and personal financial goals play a huge role in deciding which feature will be more advantage towards you and your family. I believe that mutual fund is a smart way to start your investment journey. Unlike bonds or stock, mutual funds offer features such as professional management and diversification. Investment companies will have professional fund managers to research, select, and monitor the performance of the securities for their fund’s portfolio. In addition, mutual funds is affordable and allows you to diversify your investments. Diversify your investments simply means spreading it across several choices in different companies and industry sectors. One of the advantages of this investing strategy is to help lower your risk and provide safety if a loss in one investment incurred. The loss is usually offset by other investments. However, keep in mind that investing in mutual funds also have some disadvantages. There are many fees associated with mutual fund investments, such as management fee, distribution fee, sales charge, redemption fees, exchange fee, and etc… And that will depends on the choices of investment that you make. To begin, I will tell you about some types of funds and investment options. Funds are separated into three categories: stock, bond, and other funds. Not all stock funds are the same, as well as bond funds and other funds. Stock funds include aggressive growth fund, growth funds, income funds, global funds, international funds, large-cap, midcap, small-cap funds, regional funds, and sector funds. Aggressive growth funds and growth funds seek large capital gains and rapid growth. However, they may not pay a regular dividend. In contrast, investing in stocks in equity income funds pay regular dividends. Global stock funds and international funds invest in stocks throughout the world. Small, mid, and large cap funds invest in stocks of companies according to their capitalization. Next category is bond funds, which strategies is to produce higher yields, which may come with higher risks. These include high yield; long-term, short-term, intermediate corporate bond funds; long-term, short-term, intermediate U.S bond funds; municipal bond funds; and world bond funds. Long-term, short-term, intermediate bond are categorizes based on the maturity time of the investment. Lastly, other funds category contains asset allocation, balanced, funds of fund, lifecycle, and money market funds. In comparison to other funds, money market have relatively low risks and they can invest in safe, highly liquid, short term investments issued by the government. Another factor to consider when thinking about your long-term investment strategies are the costs and fees associated with one type of investment compares to other alternatives. This can help you decide which option is best suited for you, your family, and your financial goals. Mutual funds are broken down into load funds and no-load funds. The main difference between these two are the sales charge associated with load funds. Unlike no-load fund, you must pay a sales charge every time you purchase shares. The reason for the sales charge, also known as commission charge, is because you do not deal with investment companies on your own. You will receive advices from the salespeople regarding the mutual funds and when to buy or sell. The sales charge may be as high as 8.5% and the average charge is between 3-5%. In addition, there are management fees and other charges that you will have to pay as an investors. There are many resources out there for you to utilize to help you determine which types of fund is best suited. These include professional advisory services, the…
Full Length Research Paper
Validity of efficient market hypothesis: Evidence from
UK mutual funds
M. Jibran Sheikh and Umara Noreen*
COMSATS Institute of Information Technology, Islamabad, Pakistan .
Accepted 8 September, 2011
This research is geared towards analysing performance of the fund managers an d their market
timing abilities. For the purpose of this study, sample of 50 U.K. mutual funds were selected in
random. Their returns from the beginning of 1990 to the end of 2008 were…
APPENDIX D National Instrument 81-102 Mutual Funds AMENDMENT INSTRUMENT
Section 1.1 of National Instrument 81-102 Mutual Funds is amended by adding the following after clause (b) 2 in the definition of “sales communication”: “2.1 A fund facts document or preliminary or pro forma fund facts document.”
Section 3.3 of National Instrument 81-102 Mutual Funds is amended by repealing the section and substituting the following: “3.3 Prohibition Against Reimbursement of Organization Costs…
Mutual Funds: Pros/Cons, Costs, & Growth Potential
In the ever-changing financial industry, there are numerous asset classes. Once you study into an asset class, there are additional sub asset classes that can be derived; this list can run on infinitely. In the asset class of equity securities, you find Mutual funds. A Mutual fund collects funds from several investors and invests them in a potentially wide range of assets and securities. It’s a simple concept that dates back to the 1700’s. It…
later introduced to their students are not traceable. Apart from these, Clayton also illustrated the principle agent theory in managing free capitalism. He argued that about 40% of the stock in the free market is executed by hedge fund, and 55% by mutual fund or pension fund, which means 95% of the stock is hold by people who are expected to keep these stock in less than one year.
In my opinion, I agree with Clayton’s opinion. If we always following the right rule to do things, we will naturally form…
Applied Analysis – Mutual Funds and Portfolio Building
Mr. and Mrs. Grubman have $10,000 in cash they received for their wedding. They would like to invest this amount long-term for their eventual retirement in 30 years. After an in-depth analysis of their situation, you determine that 10% should be placed in a money-market/short-term bond fund for emergencies, 50% should be place in a diversified stock fund, 20% in a intermediate/long-term bond fund, 10% in an international stock fund, and 10% in…
Classification of Mutual Funds
Mutual fund is a kind of collective investment that is managed professionally. In Mutual funds, the money is collected from a large number of investors and then it is invested in bonds, stocks, and various other securities. The fund manager of Mutual fund collects the interest income which is then distributed among the individual investors on the basis of the number of units that they hold. Mutual fund's value of a share is calculated on a daily basis…
One of the best definitions to mutual fund that I found is: an investment vehicle that is made up of a pool of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, money market instruments and similar assets. Mutual funds are operated by money managers, who invest the fund's capital and attempt to produce capital gains and income for the fund's investors. A mutual fund's portfolio is structured and maintained to match the investment objectives stated…
Derivatives and how mutual funds use them:
A customized contract between two parties to buy or sell an asset at a specified price on a future date. Either used to speculate or hedge existing positions to minimize risk.
How it works in a mutual fund:
If shorted (sold) USD and went long foreign currency, fund should expect the exchange rate from foreign currency to USD to move down. At settlement date, money is delivered to each counterparty and gain or loss is recorded in capital…
Corrine Rogers Zane Rampulla
Chaz Vanderwall Jon Coppess
What is a mutual fund ?
• You can purchase shares in a mutual fund if
you do no choose to buy individual stocks. A
mutual fund is an investment company that
pools the money of investors and buys a
collection of investments.
The Advantage of Expert Management
• Many investors lack the financial know-how to
manage their own portfolio so professionals
manage non-index. These professionals have
dedicated careers to…