i'm a novice in investing in mutual funds. i came to know that MF investing would give huge gains. can anyone give me complete info about mutual funds, the fund types; their risk factors, their gains and factors on which they depend upon & other info. i'm in india. thnks for yuur suggestions Okay, so you've settled on a Mutual Fund (MF). What sets this one apart from all the others? Did it beat the Dow last year? No. If it can't beat the index it tracks, does that make it a "good" fund? No.
Let鈥檚 look at Investment Company of America (ICA), owned and operated by American Funds (AF). AF is an awesome fund company for a couple of reasons. There are several advantages and disadvantages:
1.AF is a private company which means they only answer to their MF holders. Fidelity is a good company also, but they are owned by stock holders. In the long run the company that only answers to you, the MF holder, is going to look out for your best interests.
2.AF also has some of the lowest annual fees to maintain an account of any MF company. All that being said, depending on your situation ICA may or may not be good for you. You need a competent advisor to help you with that.
3.I would be cautious with ICA as it is one of the largest MF in the world. They may seem like a good thing but it actually can be bad. It means it has much less flexibility to move its money around when conditions warrant it.
4.As far as EJ goes, they hire people on average who have very little experience in the industry, so at a minimum make sure your rep has a lot of experience and didn't just start last month at this. They also have agreements with companies like American Funds where their reps get a bigger commission to them then they do with other products. The concern being your advice from EJ might be tainted by the reps desire to get more commission. You need to work with an independent rep to assist you with you decisions; one who will give you all the information and doesn't have a hidden agenda.
Now let's look at MF's, in general, or the decision to use one at all.
If you invest in a MF, you have turned that responsibility over to someone else. To me, they are mostly the same, in general, in terms of results. Fewer than 10% can beat the Dow or other index it follows because of their fees. Why would you pay someone you don't know, whom will almost certainly underperform the market, an annual fee of 2.5% to do something you can do yourself, and do it better by buying an ETF, without any input from you after the initial purchase? An ETF is a publicly traded 鈥淓xchange Traded Fund, that trades just like a stock). Just buy the Diamonds (the DJIA ETF) if you want to let it ride on the Dow, or the Spyders (SPY - the S&P 500 ETF), or the Nasdaq (QQQQ), or diversify across the entire market by buying all three. The ETF's trade just like a stock or MF. If you want to diversify, and you want to Buy and Hold, buy an ETF.
A MF is always "in" the market, so you are at the mercy of the ups and downs of the Dow. You are unable to manage your risk with a MF, so you can't put a Protective Stop on a MF, at say 10%, to lock in your profits when the market goes down. You don't have a clue what's going to happen. That is not my idea of investing.
Actually, if done properly, it is more work to investigate all of the MF's and their advisors and their traders and their fees and their methods, than it is to investigate all the similar applicable info about stocks. To me, it's more like a conscious choice to be ignorant, to simply and blindly turn your money over to a stranger because they are "listed," like you do at a bank. Stocks are "listed," as are commodities and ETF's and everything else. With a mutual fund, you've just added a whole new set of unknowns to the equation.
The best you can do in any investment is try to increase your odds of success and reduce your risk. You can do these things yourself, but not in a mutual fund.
MF's are so 20th Century. Relics of the past. Unneccessary. Buy an ETF. Or sell an ETF short and bet on the downside. There are two sides to every market, not just the upside. And you're asking this on here. WOW. Ok, you are interested in mutual funds. But remember they are also part of gain and loss. But be carefull not to invest more than 10- 15% of your savings in mutual funds or shares.
The market is volatile you dont know when you will loose your money. You can invest in well know mf's like franklin trempleton, reliance etc.....
But anyway you never know, you may even strike good, but sometimes you may even loose. Mutual funds are good choice next to fixed deposits.
Remember many people in olden days invested heavily in UTI mutual funds, owned by Govt. of India...and lost all the money.... Mutual funds come in different degrees of potential risk and gain. Mutual funds are basically a collection of money where the "trustee" or the one in charge of handling the investment will invest the money into different interest bearing instruments. This can either be Stocks or Bonds of Private, Public or Government origin.
Now it should be noted that mutual funds have the potential to earn greater amounts than a normal Time Deposit from the bank, but mutual funds also have the potential of negative earnings so you must be cautious as to which mutual funds you place your money in. If you want a less risky investments, time deposites are a safer bet but with lower interest.
The most important consideration in investing your money is to look into who is managing the mutual fund and their history of management. Typically, mutual funds with a long and clean history of earnings is a good bet, but past performance is not a indication of what may happen in the future, so it is wise not to put all your money in a MF. I would suggest you go to the websites of Indian countries that offer the sale and management of mutual funds in your country. Mutual Funds as well as any investment have a risk factor. There is no guarantee that any mutual fund you choose will the be the one that will be making you a millionaire really fast.
My advice is to check the track records of various mutual funds. See if they have consistent yearly gains. A one year gain of 100% does not mean that will be the case every year. Also check how long the mangement team has been in place. A recent change in management can mean a change in performance. Also try to find a fund which invests in industries in which you have an interest or knowledge. By investing in industries which you know about may tell you when to buy more or sell your investment. try spending some time exploring yahoo finance, which has a lot of information about mutual funds, also
www.morningstar.com Yes you could learn invest by yourself. it is your money, you should know how to do with it. for starter check this site out.
http://www.pathtoinvesting.org/index_fla...
http://www.stockcharts.com
>...http://www.streettalklive.com>... university. a lot amount of information. It will serve you well
I accumulate in good amount in 401k at the young age.I could share with you. when consider invest in stock market. you should consider basic 3 things:
fundamental analysis==(economic data,finincial health, management, business model, competetion)>>what to buy
technical analysis==(chart+indicator)>> when to buy
Sentiment/schycho analysis==>>mood of investor, Contrarian point of view.
Market cycle===>> check out book Trader Almanac by jeff hirsch will give you inside stuff
When you combine 3 thing, It is one of the powerful knowledge goinh with you for the rest of your live
At the age of 32. my 401k is amassed 73,000.00 and 30000.00 in taxble account. by follow simple rule |
