which mutual funds are right for me?

There are thousands of mutual funds on the market,so it can be a challenge to choose a mutual fund


Fund Type:
Every fund has a particular investing strategy and purpose,you should have a fair understanding of the different kinds of mutual funds.

Example: bond funds, tax-free bond funds, and international funds .Finding a mutual fund that fits your investment criteria and style is absolutely vital; . You must know and understand your investment.

1) Find funds that match your investment objectivesAdjust your portfolio for growth or income.Compare a specific type of mutual fund to others in that same category.

2) What I will invest example: $1,000Based On What I'm investing What I'll have when I sell

3) Buy only from registered advisers:

4) The next step is to determine how much risk you can tolerate

5) What is the current unit price?

This tells you how many units you can buy with your money.

6) Determine how long the fund manager has managed the fund.

7) Time Horizons: Does the investment fit with your expected investmenttime horizon short time or nothow long years example: 5

8) Flexibility: Will you be entitled to switch your investment to other funds inthe same ‘fund family'

9) What fees will I pay?

Fees Sales Fees (Load)When I Sell (Back End)When I Buy (Front End)None (No Load)

10 Fund Performance.

Even tough past performance doesn’t guarantee future returns,but it certanely cangive an idea looking at both long term and short term past performance .

Equity investment

Equity investment generally refers to the buying and holding of shares of stock on a stock market by individuals and funds in anticipation of income from dividends and capital gain as the value of the stock rises. It also sometimes refers to the acquisition of equity (ownership) participation in a private (unlisted) company or a startup (a company being created or newly created). When the investment is in infant companies, it is referred to as venture capital investing and is generally understood to be higher risk than investment in listed going-concern situations.


Direct holdings and pooled funds
The equities held by private individuals are often held via mutual funds or other forms of pooled investment vehicle, many of which have quoted prices that are listed in financial newspapers or magazines; the mutual funds are typically managed by prominent fund management firms (e.g. Fidelity Investments or The Vanguard Group). Such holdings allow individual investors to obtain the diversification of the fund(s) and to obtain the skill of the professional fund managers in charge of the fund(s). An alternative usually employed by large private investors and institutions (e.g. large pension funds) is to hold shares directly;in the institutional environment many clients that own portfolios have what are called segregated funds as opposed to, or in addition to, the pooled e.g. mutual fund alternative

Analysis
To try to identify good shares to invest in, two main schools of thought exist: technical analysis and fundamental analysis. The former involves the study of the price history of a share(s) and the price history of the stock market as a whole; technical analysts have developed an array of indicators, some very complex, that seek to tease useful information from the price and volume series. Fundamental analysis involves study of all pertinent information relevant to the stock and market in question in an attempt to forecast future business and financial developments including the likely trajectory of the share price(s) itself. The fundamental information studied will include the annual report and accounts, industry data (such as sales and order trends) and study of the financial and economic environment (e.g. the trend of interest rates).

Reference : http://en.wikipedia.org/wiki/Equity_investment

Tips For Choosing High-Performance Mutual Fund

Most people who invest in mutual funds don't know what they are doing. They take advice from someone at a bank or perhaps a friend and plunk down money into a fund. Sometimes this strategy works, but most of the time, it doesn't.

When you invest your money in a mutual fund, you are trusting someone to invest in the stock market for you. Because of this, you want to be sure this person knows what he or she is doing. Also, you want to make sure that this person is not charging you too much to manage your money for you. Mutual funds fees are "hidden," in the sense that they do not charge you an upfront fee but rather a percentage of the amount of money in your account. If this percentage is too high, you would do better just blindly picking stocks yourself.

Here are five helpful tips for choosing the right mutual funds.



1. Keep the fees low. Generally, expense fees should not be much higher than 1% if it is just a basic domestic equity fund. You should never invest money in a fund that also charges a "load," which is an additional fee that is ridiculous to pay. Never invest in funds that charge loads; those funds are for suckers.

2. Check the asset base. Mutual fund managers only know of so many good investments. When they have too much money to manage, they begin investing in stocks they don't like much but need to invest in anyway or else they'll just have money laying around. There's little reason to invest in a fund with over $5 billion in assets. It's best if it's under $2 billion generally.

3. Consider an index fund. This is a fund that tracks a stock index, such as the S&P 500. For these funds, the manager just buys whatever stocks happen to be in the index. Since this is not much work, the fees are much lower. Even though this method is simple, it has proven to perform better than most mutual funds. Some high performance index funds include FSMKX (Fidelity S&P 500) and VIMSX (Vanguard S&P 400 Midcap.

4. Evaluate the fund's strategy. If you have a long term outlook, look for a more aggressive fund that invests in small-cap stocks, international stocks, and riskier stocks in general. High risk tends to result in high performance in the long run. If you are more risk-averse, consider an S&P 500 index fund.

5. Keep the fees low. Did I mention this already? Well, I'll mention it again. This is where most people mess up. Make sure you are not paying a load or paying too much in fees to the mutual fund.

More information about mutual funds can be found at Research Mutual Funds.








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How To Make Money In The Stock Market

When it comes to learning how to make money in the stock market the first and most important lesson is to ignore what Wall Street is telling you and try to avoid that broker.

Suddenly you are faced with brokerage fees and you are reliant on contacting your broker to get the job done. If you listened to a Wall Street broker the only words you would ever hear are buy. That’s why you need to learn how to make money in the stock market.

The problem is anyone can buy stocks but it’s knowing when to sell stocks that makes you rich. It’s having an exit strategy that works and those that have made millions had just that. Your broker get’s wealthy because he sells you stocks and makes a commission. It’s time you developed your own exit strategy and knew how to make money in the stock market.

You need to first study the market. Look for companies that are undervalued and stocks with a lower price earning ratios than similar stocks then seek out bad news. Wall Street loves to overreact. This is your chance to make some investments with great potential. Investigate company balance sheets and watch for good cash flow, low debt ratios, and consistent earnings. And most of all know when to cut your losses and bow out gracefully once you learn how to make money in the stock market.

As a shareholder there are two ways you can make money – by being paid a dividend or by holding the stocks and selling when their value increases. Remember a company does not have to pay out dividends if they do not wish too. Personal preference is to go for the hold and sell at an increased value which is where your exit strategy comes into play which when you learn how to make money in the stock market you will also learn the exit strategy.

There are three things to consider when building your exit strategy. You have to ask yourself how long you are planning on staying in this trade, How much risk you are willing to take, and where are you wanting to go from here. When you answer these questions truthfully your path will become clear and you will be on your way to making money in the stock market.

Making money in the stock market is your ticket out of the 9 to 5 world.

Copyright © 2007 Joel Teo. All rights reserved. (You may publish this article in its entirety with the following author's information with live links only.)


About The Author: Joel Teo invites you to submit your best articles to www.GlobalProsperity.info/ the best free article directory.

Mutual Fund Fees

As you might expect, fees and expenses vary from fund to fund. A fund with high costs must perform better than a low-cost fund to generate the same returns for you. Even small differences in fees can translate into large differences in returns over time.

For example, if you invested $10,000 in a fund that produced a 10% annual return before expenses and had annual operating expenses of 1.5%, then after 20 years you would have roughly $49,725. But if the fund had expenses of only 0.5%, then you would end up with $60,858.

These fees and charges are identified in a fee table, located near the front of a fund’s prospectusShareholder Fees

Sales LoadsFunds that use brokers to sell their shares typically compensate the brokers. Funds may do this by imposing a fee on investors, known as a "sales load" (or "sales charge (load)"), which is paid to the selling brokers. In this respect, a sales load is like a commission investors pay when they purchase any type of security from a broker.

There are two general types of sales loads—
a front-end

a back-end or deferred sales

Sales Charge (Load) on PurchasesA front-end sales load investors pay when they purchase fund shares .The key point to keep in mind about a front-end sales load is it reduces the amount available to purchase fund shares.

Deferred Sales Charge (Load)A back-end or deferred sales load investors pay when they redeem their shares.When an investor purchases shares that are subject to a back-end sales load rather than a front-end sales load, no sales load is deducted at purchase, and all of the investors’ money is immediately used to purchase fund shares (assuming that no other fees or charges apply at the time of purchase)

No-Load FundsAs the name implies, this means that the fund does not charge any type of sales load. As described above, however, not every type of shareholder fee is a "sales load," and a no-load fund may charge fees that are not sales loads. For example, a no-load fund is permitted to charge purchase fees, redemption fees, exchange fees, and account fees, none of which is considered to be a "sales load."

Redemption Fee A redemption fee is another type of fee that some funds charge their shareholders when the shareholders redeem their shares. Redemption fee is not considered to be a sales load. Unlike a sales load, which is used to pay brokers, a redemption fee is typically used to defray fund costs associated with a shareholder’s redemption and is paid directly to the fund, not to a broker.

Exchange Fee An exchange fee is a fee that some funds impose on shareholders if they exchange (transfer) to another fund within the same fund group.

Account Fee An account fee is a fee that some funds separately impose on investors in connection with the maintenance of their accounts

Purchase FeeA purchase fee is another type of fee that some funds charge their shareholders when the shareholders purchase their shares. A purchase fee is not considered to be, a front-end sales load because a purchase fee is paid to the fund (not to a broker)

Management FeesManagement fees are fees that are paid out of fund assets to the fund’s investment adviser (or its affiliates) for managing the fund’s investment portfolio , and administrative fees payable to the investment adviser that are not included in the "Other Expenses" category (discussed below).

Total Annual Fund Operating Expenses

This line of the fee table is the total of a fund’s annual fund operating expenses, expressed as a percentage of the fund’s average net assets.

TaxTaxesWhen a fund manager sells a stock for a gain, the law says it becomes a taxable event. That transaction may be offset by any losses the manager incurs when he sells a doggy stock. But if the sum of all the transactions during the year equals an overall gain, somebody has to pay the tax billThese gains are paid out in the form of taxable distributions. There's nothing worse than ending the year with a fat one you weren't expecting. It's even more bitter when the gain falls into the short-term category -- a big problem with fund managers who trade often. Short-term gains are taxed as regular income instead of at the lower 20% tax rate levied on long-term capital gains

Before investing in any mutual fund be sure to review the prospectus carefully. If you have any questions about the fund, be sure to consult your financial or investment advisor

Types of Mutual Funds and some basic terminlogies

1) Open-end mutual fundAn open-end mutual fund is a collective investment which can issue and redeem shares at any time. An investor can purchase shares in such funds directly from the mutual fund company, or through a brokerage house. An open-end fund issues new shares as new investors invest in the fund

2) Closed-end FundsA pooled investments fund that has a fixed capitalization after the initial issue. Fund shares are bought from or sold to other investors in the over-the-counter market or traded on an exchangeA closed-end fund limits the number of shares available


Mutual fund categories

aggressive growth fund,asset allocation fund,balanced fund,blend fund,bond fund,capital appreciation fund,clone fund,closed fund,crossover fund,equity fund,fund of funds,global fund,growth fund,growth and income fund ,hedge fund,income fund,index fund,international fund,moneymarket fund,municipal bond fund,prime rate fund,regional fund,sector fund,speciality fund ,stock fund and tax-free bond fund.

Net asset valueThis is the total value of assets the investment company holds, minus the total value of liabilities. This total is then divided by the total number of shares outstanding. This value reflects the ups and downs of the value of the underlying securities held by the fund.

Example, if a mutual fund has an NAV of $100 million, and investors own 10,000,000 of the fund’s shares, the fund’s per share NAV will be $10. Because per share NAV is based on NAV, which changes daily, and on the number of shares held by investors, which also changes daily, per share NAV also will change daily.

NAV) represents a fund's per share market value. This is the price at which investors buy ("bid price") fund shares from a fund company and sell them ("redemption price") to a fund companyBecause mutual funds distribute virtually all their income and realized capital gains to fund shareholders, a mutual fund's NAV is relatively unimportant in gauging a fund's performance, which is best judged by its total return.

An investment company calculates the NAV of a single share (or the "per share NAV") by dividing its NAV by the number of shares that are outstanding.

what is mutual funds

Definition of mutual funds

A mutual fund is a professionally-managed form of collective investments that pools money from many investors and invests it in stocks,bonds, short-termmoney market instruments, and/or other securities

In a mutual fund, the fund manager, who is also known as the portfolio manager, trades the fund's underlying securities, realizing capital gains or losses, and collects the dividend or intrest income The investment proceeds are then passed along to the individual investors.

The value of a share of the mutual fund, known as the net asset value per share (NAV), is calculated daily based on the total value of the fund divided by the number of shares currently issued and outstanding


Advantages of Mutual Funds
1) A professional skilled in choosing stocks does all of your work for you.
2) A mutual fund gives you instant diversification.
3) A fund exists for every financial goal and risk tolerance level.
4) Mutual funds are also quite liquid. A mutual fund investment can be converted into cash upon your request.

Disadvantages of Mutual Funds

As with any type of investment, there are drawbacks associated with mutual funds.

1) Mutual fund investors have no control over what to invest in. Unlike picking your own individual stocks, a mutual fund puts you at the mercy of the manager.

2) Mutual funds generally have only small holdings of so many different stocks. When a fund’s top holdings jump to high numbers, this doesn’t make much of a difference in a mutual fund’s total performance. There is really just small gain realized from even top the top performing stocks. This is caused by over diversification.

3) There are fees and expenses associated with investing in mutual funds that do not usually occur when purchasing individual securities directly.Funds will typically have a range of different fees that reduce the overall payout. Often, these fees are not well explained to investors

4) Changing market conditions can create fluctuations in the value of a mutual fund investment.


5) Misleading AdvertisementsThe misleading advertisements of different mutual funds can guide investors down the wrong path. Some funds may be incorrectly labeled as growth funds, while others are classified as small-cap or income.


6) Evaluating Funds Another disadvantage of mutual funds is the difficulty they pose for investors interested in researching and evaluating the different funds. Unlike stocks, mutual funds do not offer investors the opportunity to compare the P/E ratio, sales growth, earnings per share, etc.Past performance doesn’t provide exact information for future performances, it can only assist you appraising fund’s volatility over time.


Prospectuses will not contain all the costs that affect the net return on your investment. This is why it is important to compare net returns whether or not the fund in a no-load or load fund.