It looks like the market is ready to start up again so it is time to buy mutual funds, but you only want to invest your money in funds that go up. First, you don’t want to start with a loss so be sure to purchase no-load mutual funds. There is no need to ever pay commissions as there are several thousand funds that have no commission whatsoever for either buying or selling.

If you talk with a broker he will try to confuse you that a commission fund is better than a no-load fund. He is lying. Find another broker. Also don’t pay any attention to who the fund manager is. All big name fund managers have cold periods when their funds go down.

Another thing the “experts” tell you is look at the expense ratios. Nonsense again. Whether it is 1%, 2% or 3% the only thing you are concerned with is is it going up because that is the net figure for your bank account. If you buy a fund at $20/share and it goes to $40/share do you care if the expense ratio is 10%? (It won’t be.) The only thing that counts is the bottom line.

(more…)

Managed funds are an easy way to invest wisely and with low risk. Investment in a fixed term deposit especially with a fund that invests in real estate is an easy way to grow to your wealth.

Apart from being a great way to have your money managed by investment professionals, managed funds also simplify the process of building and maintaining an investment portfolio. Instead of tracking a wide range of individual investments, your fund will keep track for you, and the progress of your investment is expressed in one simple unit price.

A Bit Here and a Bit There

With any investment strategy diversification is important to minimise risk. The resources available to financial institutions are usually greater than those of the individual investor, therefore diversification is much easier as part of a managed fund than it would be if you had to raise the capital for a truly diverse and therefore more secure investment yourself.

(more…)

It is easy to understand why people would invest in mutual funds, but is it really a smart play? I would say the majority of investors select mutual funds because a) it is easy b) they think the professionals must be able to do better than them c) only option in their company’s 401K. Now there isn’t anything you can do about a company not offering self directed accounts, but most investors even given the option would go mutual funds over selecting stocks themselves. To compound the problem, the majority of investors select the top returning mutual funds from the previous year when they select one. If a mutual fund they own is doing bad, they will drop that one and take the highest returning fund in their pool of funds. Statistics prove that this strategy will not beat the S&P 500 over the long haul.

There is no doubt that there plenty of good mutual funds out there; in fact there are some great ones. The problem is the majority of investors are not in these funds. I’ve read multiple articles with various stats on how many mutual funds actually beat the S&P 500 year over year. These numbers generally are between 10 and 20 percent, which is a staggering number if you think about it. Why would you want to park your money in a fund that isn’t beating the indexes on a consistent basis? Why not just pick an index fund and avoid the fees.

(more…)