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
titled, "When Mutual Funds Behaved Badly."
The Securities and Exchange Commission (SEC) have recently identified two significant types of trading abuses in the mutual fund industry--market timing and late trading. The most common abuse was market timing, because some favored customs are allowed to trade frequently in mutual fund firms. These actions will harm mutual fund shareholders by increasing transaction costs and lowering profits. Late trading occurs when investors trade fund shares after…
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…
Miller and Value Trust
Bill Miller is one of the most renowned professional fund managers. This can be proven by the outperformance of the Value Trust, which is managed by him, compared to its benchmark index, the Standard & Poor’s 500 Index (S&P 500), for an astonishing 14 years in a row; and this marked the longest streak of success for any manager in the mutual-fund industry. By the middle of 2005, Value Trust is worth $11.2-billion.
Bill Miller’s approach to investment…
STOCK-TRAK portfolio should be weighted (percent held in stocks,
bonds, cash, etc.). Describe how the current state of the economy and
current stock price levels may affect your investment performance.
Note: Each student must turn in a 1-page report with the name of their
company, and the information noted above, along with the investment
goals for the STOCK-TRAK portfolio. You must turn this in by
beginning of class on Tuesday, January 20th and there is a 20% penalty
for failing to do so…
This report is aim to analyse the benefits of risk-adjusted performance measurements to Zeus Asset Management. Zeus Asset Management is a fund management firm founded in 1968 in Atlanta by Tir Jerry Schneider. It serves both institutional and individual investors and with more than $1.7 million assets under management. The director of research, John Abbot, is considering adopting risk-adjusted approach in performance assessment.
Zeus’s competitiveness analysis
Zeus’s main competitors…
example, pension funds were privatized in 1992 creating a role for institutional investors to invest in local capital markets. Despite the government’s efforts to deepen capital markets instead of relying on the banking system, capital markets have not developed to the extent of some other emerging markets, and still far behind developed economics. Investor participation remains low as pension funds remain the major institutional investors in capital markets in Peru, followed by mutual funds, and insurance…
Finance Analysis Paper
Yahoo! Finance is a service from Yahoo that provides financial information in various ways including stock quotes, corporate press releases, financial reports, stock exchange rates as well as popular message boards for discussing a company's forecasts and stock valuations. It holds the title for the top financial news and research website in the United States, with an astounding 23 million visitors in February 2010. It also offers tools for personal finance…
performance of mutual funds and the school the fund manager earned his/her MBA. – The following table describes the joint probabilities.
Mutual fund Mutual fund doesn’t outperform the market outperform the market Top 20 MBA program Not top 20 MBA program
• Example 6.1 (pg. 182)– continued
– The joint probability of
[mutual fund outperform…] and […from a top 20 …] = .11 – The joint probability of [mutual fund outperform…] and […not from a top 20 …] = .06
ability to tolerate risk and Time Horizon
Sales Representative: Help the client obtain mutual fund based on KYC information, suggest alternatives, only discuss mutual funds, Incomplete KYC –refuse the order.
Close ended fund: is a publicly traded investment company that raises a fixed amount of capital through an initial public offering.
Open ended Fund: that does not have restriction on the amount of share the fund will issue.
Volatility: statistical measure of the dispersion of return for give security…