Welcome to your ultimate fund investment resource


Mutual Funds-One Of The Financial World's Most Popular Investment Vehicles

Mutual funds are one of the financial world'ssometimes  called  a  "load."
most popular investment vehicles, and for
good  reason.Essentially, you are paying them to have the
heartburn and ulcers associated with watching
For a relatively small investment, thesethe stock market eight hours a day, 52 weeks
funds give individual investors the abilitya year, so that you don't have to. Whether or
to buy a diverse portfolio of stocks and / ornot the fund managers earn their keep depends
other financial instruments - all in oneon how skillful they are, and how the fund's
transaction.fees  are  structured.
If you have just two or more mutual funds,Load mutual funds charge either front-end
chances are that you're more than adequatelyloads or back-end loads. Front-end loads
diversified. This means that you don't havecharge you a percentage of your initial
to worry about one bad apple (i.e. Enron)investment.
destroying  your  entire  investment account.
For example, if you invest $10,000 each into
How  Mutual  Funds  Worka pair of front-end load funds with loads of
3 percent and 5 percent, you will only be
So how do these funds work? Each fund isinvesting $9,700 and $9,500, respectively.
actively managed by a mutual fundsHow long will it take your funds to make up
professional. This is someone who has severalthe  $800  you've  lost  right  off  the bat?
years of experience analyzing and trading
stocks or other securities, probably has anInstead of charging you up front, back-end
advanced degree, and has worked his or herload funds don't charge you a load until you
way up the ladder to what is essentially thewithdraw  your  money.
top  of  the  money  management  profession.
These funds are usually a better deal,
The fund manager chooses the securities thatbecause the size of the loads usually
the mutual fund owns. These funds can bedecreases the longer you leave your money in
composed of stocks, bonds, and / or otherthe  fund.
financial  instruments.
For example, a back-end load fund might have
The types and balance of securities (i.e. 60a load of 7 percent if you withdraw your
percent stocks, 35 percent bonds, 5 percentmoney the first year, with the load going
cash / money market), and the investmentdown by 1 percentage point each year, and
objectives and strategies (i.e. aggressivereaching  0  percent  by  the  eighth  year.
growth or equity income) are listed in the
mutual  fund's  prospectus.Mutual Funds - Just Say No To Your Broker;
Buy  Direct  Instead
This way investors know what they are getting
into  each  time  they  buy new mutual funds.Typically, full-service brokers with offices
on Main Street only sell front-end load
Mutual funds are split into shares, just likefunds. This is because they receive an
stocks. For example, a fund may own 5,000up-front commission on the sale of these
shares of Microsoft (MSFT); 10,000 shares ofproducts.
General Motors (GM); 20,000 shares of Alcoa
(AA), etc., and be split into 100 millionMutual funds are designed for average
shares  itself.investors - you don't need a broker to
recommend these funds for you, and you don't
If the net asset value (NAV) of the shares isneed  to  pay  the  extra  sales  charges.
$1 billion, then each share of the fund would
be worth $10. The fund manager buys and sellsThere are hundreds of good, no-load funds
shares of stock that the fund owns - you, inthat charge only a small annual management
turn, can buy or sell your shares of thefee (which load mutual funds charge in
fund, but only at the end of each tradingaddition to their loads) available directly
day.from  fund  companies.
No  Load  Mutual  Funds vs. Load Mutual FundsMost funds have a minimum investment of
$2,500, but this can usually be waved if you
So what's the catch? Well, mutual fundcommit to regular monthly investments of as
managers have to be compensated for theirlittle as $50.
services, so they charge you a fee which is



1 A 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72