Mutual Funds: Most Popular Articles
These articles are the most popular over the last month.
Where to Invest 2012 - Bonds
What are the best ways to invest with bond funds in 2012? If you thought stocks face an uphill battle in 2012, bonds have a similar challenge.
What are the best ways to invest with bond funds in 2012? If you thought stocks face an uphill battle in 2012, bonds have a similar challenge.
What Are Mutual Funds?
As a popular investment option, you have probably already heard plenty about mutual funds. Chances are you own mutual funds in your retirement plan or brokerage account. In fact, according to the Investment Company Institute, more than 92 million individuals in the U.S. (about 45% of U.S. households) owned mutual funds in 2008. But do you know what mutual funds are and why so many people own them?
As a popular investment option, you have probably already heard plenty about mutual funds. Chances are you own mutual funds in your retirement plan or brokerage account. In fact, according to the Investment Company Institute, more than 92 million individuals in the U.S. (about 45% of U.S. households) owned mutual funds in 2008. But do you know what mutual funds are and why so many people own them?
Where to Invest 2012 - Hub
Knowing where to invest in 2012, or any time frame, requires a complete guide that covers strategies and ideas for asset allocation, stocks, bonds, cash, sectors, foreign investing, indexes and ETFs. Check this efficient overview to quickly find the ideas you need to invest in 2012.
Knowing where to invest in 2012, or any time frame, requires a complete guide that covers strategies and ideas for asset allocation, stocks, bonds, cash, sectors, foreign investing, indexes and ETFs. Check this efficient overview to quickly find the ideas you need to invest in 2012.
Where to Invest 2012 - Allocation
Many investors wonder where to invest now but they do not consider how to invest - the basics of investing.
Many investors wonder where to invest now but they do not consider how to invest - the basics of investing.
What Are Index Funds?
Index funds are mutual funds that are intended to track the returns of a market index. Index funds are considered to be passively managed because the portfolio manager of each index fund is replicating the index, rather than trading securities based on his or her view of the potential risk/reward characteristics of various securities. In recent years, more obscure indexes have been created.
Index funds are mutual funds that are intended to track the returns of a market index. Index funds are considered to be passively managed because the portfolio manager of each index fund is replicating the index, rather than trading securities based on his or her view of the potential risk/reward characteristics of various securities. In recent years, more obscure indexes have been created.
How to Buy a Mutual Fund
You have decided to add mutual funds to your well-balanced portfolio. Your next step is to sift through the myriad of choices -- where do you buy mutual funds and how much is it going to cost you?
You have decided to add mutual funds to your well-balanced portfolio. Your next step is to sift through the myriad of choices -- where do you buy mutual funds and how much is it going to cost you?
Where to Invest 2012 - Sectors
Which sectors of the economy will do well in 2012? No one knows for sure but there are a few sectors that look better than others, especially if the economy continues to be weak and stocks continue to struggle.
Which sectors of the economy will do well in 2012? No one knows for sure but there are a few sectors that look better than others, especially if the economy continues to be weak and stocks continue to struggle.
TIPS Mutual Funds
TIPS mutual funds offer many advantages to investors. TIPS are bonds issued by the US Treasury that pay a coupon on the adjusted principal of the bond. The bond is adjusted on a semi-annual basis with the rate of the Consumer Price Index (a measure of inflation).
TIPS mutual funds offer many advantages to investors. TIPS are bonds issued by the US Treasury that pay a coupon on the adjusted principal of the bond. The bond is adjusted on a semi-annual basis with the rate of the Consumer Price Index (a measure of inflation).
Index Funds vs. Actively-Manag
The evidence shows that there are good active managers, but finding such managers in advance of their outperformance is difficult. According to Vanguard, for the 10 years leading up to 2007, the majority of actively-managed U.S. stock funds underperformed the index they were seeking to outperform.
The evidence shows that there are good active managers, but finding such managers in advance of their outperformance is difficult. According to Vanguard, for the 10 years leading up to 2007, the majority of actively-managed U.S. stock funds underperformed the index they were seeking to outperform.
Disadvantages of Funds
Before you invest, you should do your homework. Will you choose to use mutual funds, closed-end funds, ETFs, and/or individual stocks and bonds? Inevitably, your homework assignment will lead you to articles outlining the disadvantages of mutual funds. But are all of these so-called disadvantages of mutual funds really disadvantages of mutual funds? Let’s take a look at several so-called disadvantages of mutual funds,and how you can avoid them.
Before you invest, you should do your homework. Will you choose to use mutual funds, closed-end funds, ETFs, and/or individual stocks and bonds? Inevitably, your homework assignment will lead you to articles outlining the disadvantages of mutual funds. But are all of these so-called disadvantages of mutual funds really disadvantages of mutual funds? Let’s take a look at several so-called disadvantages of mutual funds,and how you can avoid them.
Build a Portfolio
Building a portfolio of mutual funds is similar to building a house: There are many different kinds of
Building a portfolio of mutual funds is similar to building a house: There are many different kinds of
Where to Invest 2012 - Foreign
Where to invest in 2012 will be challenging, especially for foreign stock. As always, foreign (international, global, emerging markets) can play in important role in a diversified portfolio. How can investors balance risk and growth in 2012?
Where to invest in 2012 will be challenging, especially for foreign stock. As always, foreign (international, global, emerging markets) can play in important role in a diversified portfolio. How can investors balance risk and growth in 2012?
No-Load Mutual Funds
How many times have we been told that there is no free lunch? The same holds true with no-load mutual funds. No-load mutual funds are free of sales charges (loads), but they do have costs. All share classes of funds -- load or no load -- carry fees that are paid out of the fund’s assets to the fund’s investment advisors (as opposed to paying the advisor/broker who sells the fund).
How many times have we been told that there is no free lunch? The same holds true with no-load mutual funds. No-load mutual funds are free of sales charges (loads), but they do have costs. All share classes of funds -- load or no load -- carry fees that are paid out of the fund’s assets to the fund’s investment advisors (as opposed to paying the advisor/broker who sells the fund).
Mutual Fund Distributions
Each year, generally in the last couple of months of the year, mutual fund shareholders face the possibility of receiving capital gains distributions from their mutual funds. Don’t be fooled by the capital gains distributions. These are not gains of the good sort.
Each year, generally in the last couple of months of the year, mutual fund shareholders face the possibility of receiving capital gains distributions from their mutual funds. Don’t be fooled by the capital gains distributions. These are not gains of the good sort.
What Are Closed-End Funds?
Closed-end funds are often confused with, and mistakenly called, mutual funds. A major difference is that closed-end funds behave more like a stock -- the market value is driven by supply and demand for the shares. Perhaps the best way to understand a closed-end fund is to compare it with an open-end mutual fund.
Closed-end funds are often confused with, and mistakenly called, mutual funds. A major difference is that closed-end funds behave more like a stock -- the market value is driven by supply and demand for the shares. Perhaps the best way to understand a closed-end fund is to compare it with an open-end mutual fund.
Aggressive Portfolio
For an example of how to build an aggressive portfolio of mutual funds, take a look at this model allocation.
For an example of how to build an aggressive portfolio of mutual funds, take a look at this model allocation.
Tips for Buying Funds
If you need to know how to buy mutual funds that are best for you, the process does not need to be complex. Buying mutual funds can be simple and profitable if you follow a few basic steps.
If you need to know how to buy mutual funds that are best for you, the process does not need to be complex. Buying mutual funds can be simple and profitable if you follow a few basic steps.
Advantages of a Mutual Fund
There are many reasons to buy a mutual fund. While there are a plethora of investment options (individual stocks, ETFs and close-end funds, to name a few) if you buy a mutual fund, then you a simple, efficient way to invest for retirement, education or other financial goals.
There are many reasons to buy a mutual fund. While there are a plethora of investment options (individual stocks, ETFs and close-end funds, to name a few) if you buy a mutual fund, then you a simple, efficient way to invest for retirement, education or other financial goals.
Mutual Fund Fees
There are various classes of shares of each mutual fund available for purchase (a mutual fund may offer various classes of shares to investors -- the differences are in the fees and expenses of each share class). Several common share classes are: Class A, Class B and Class C. Each share class requires a management and operating fee and many share classes charge a 12b-1 fee.
There are various classes of shares of each mutual fund available for purchase (a mutual fund may offer various classes of shares to investors -- the differences are in the fees and expenses of each share class). Several common share classes are: Class A, Class B and Class C. Each share class requires a management and operating fee and many share classes charge a 12b-1 fee.
Moderate Portfolio
For an example of how to build an moderate portfolio of mutual funds, take a look at this model allocation.
For an example of how to build an moderate portfolio of mutual funds, take a look at this model allocation.
Best S&P 500 Index Funds
Finding the best S&P 500 Index funds can be easy if you know what to look for. Here are a few of the top S&P 500 Index funds and why we recommend them.
Finding the best S&P 500 Index funds can be easy if you know what to look for. Here are a few of the top S&P 500 Index funds and why we recommend them.
Money Market Advantages
Money market funds are mutual funds that invest in short-term, high-quality fixed income securities. Money market funds are regulated by the US Securities and Exchange Commission (SEC). The SEC seeks to assure that risks are limited and investors’ interests are protected.
Money market funds are mutual funds that invest in short-term, high-quality fixed income securities. Money market funds are regulated by the US Securities and Exchange Commission (SEC). The SEC seeks to assure that risks are limited and investors’ interests are protected.
Should You Buy B Shares?
You may hear that mutual fund B shares are a good buy -- generally from transaction-oriented, commission-based advisors/brokers. But more and more mutual fund companies are saying “goodbye” to mutual fund B shares.
You may hear that mutual fund B shares are a good buy -- generally from transaction-oriented, commission-based advisors/brokers. But more and more mutual fund companies are saying “goodbye” to mutual fund B shares.
How to Choose Best Funds
Choosing the best mutual funds can be easy. Learn how to find and choose the best mutual funds for you with simple and proven methods.
Choosing the best mutual funds can be easy. Learn how to find and choose the best mutual funds for you with simple and proven methods.
Analyze a Fund
There is more to analyzing a mutual fund than reviewing past performance. In fact, the best predictors of future performance include factors many investors overlook.
There is more to analyzing a mutual fund than reviewing past performance. In fact, the best predictors of future performance include factors many investors overlook.
Structure of Funds
Technically, mutual funds are “open-end” funds -- one of four types of investment companies. Closed-end funds, exchange-traded funds and unit investment trusts are the three other types. In order to understand the structure of mutual funds, it is helpful to compare other “40 Act Funds” – industry jargon for investment companies registered under the Investment Company Act of 1940.
Technically, mutual funds are “open-end” funds -- one of four types of investment companies. Closed-end funds, exchange-traded funds and unit investment trusts are the three other types. In order to understand the structure of mutual funds, it is helpful to compare other “40 Act Funds” – industry jargon for investment companies registered under the Investment Company Act of 1940.
How to Get Started Investing With Funds
To get started investing with mutual funds, you will need to know the basics. Learn how to get started investing with mutual funds by understanding the mutual fund types, taxation and how to buy a mutual fund.
To get started investing with mutual funds, you will need to know the basics. Learn how to get started investing with mutual funds by understanding the mutual fund types, taxation and how to buy a mutual fund.
Research Funds
Whether you use an advisor or you do it yourself, you might enjoy a few sites to help you research mutual funds. The first place to research mutual funds is the sites of the broker and/or mutual fund companies. If you feel compelled to research your mutual funds further, you might want to try one of the sites below.
Whether you use an advisor or you do it yourself, you might enjoy a few sites to help you research mutual funds. The first place to research mutual funds is the sites of the broker and/or mutual fund companies. If you feel compelled to research your mutual funds further, you might want to try one of the sites below.
Diversification
If the three most important things about investing in real estate are: “location, location and location,” then the three most important things about investing in equities are: “diversification, diversification and diversification.”
If the three most important things about investing in real estate are: “location, location and location,” then the three most important things about investing in equities are: “diversification, diversification and diversification.”
Fixed Income Funds
Fixed income funds are an excellent diversification tool for investors’ portfolios. These fixed income funds come in many shapes and styles. Let’s start with five basic types of fixed income funds.
Fixed income funds are an excellent diversification tool for investors’ portfolios. These fixed income funds come in many shapes and styles. Let’s start with five basic types of fixed income funds.
Conservative Portfolio
For an example of how to build an conservative portfolio of mutual funds, take a look at this model allocation.
For an example of how to build an conservative portfolio of mutual funds, take a look at this model allocation.
Risks of Investing in TIPS
John Hollyer, co-manager of Vanguard Inflation-Protected Securities, outlines why deflation is a risk of investing in TIPS.
John Hollyer, co-manager of Vanguard Inflation-Protected Securities, outlines why deflation is a risk of investing in TIPS.
Dividend Mutual Funds
Dividend mutual funds are stock mutual funds that primarily invest in companies that pay dividends, which are profits that companies share with stock shareholders. Learn how to use dividend mutual funds to your advantage.
Dividend mutual funds are stock mutual funds that primarily invest in companies that pay dividends, which are profits that companies share with stock shareholders. Learn how to use dividend mutual funds to your advantage.
Regulations of Funds
Regulation of mutual funds, compared to other pooled investment options is extensive. Mutual funds must comply with a strict set of rules that are monitored by the Securities and Exchange Commission.
Regulation of mutual funds, compared to other pooled investment options is extensive. Mutual funds must comply with a strict set of rules that are monitored by the Securities and Exchange Commission.
No-Load Fund Families
There are hundreds of fund families to choose from but there are only a few that offer investors a wide variety of high quality no-load funds. Find out which fund families are the best for no-load funds.
There are hundreds of fund families to choose from but there are only a few that offer investors a wide variety of high quality no-load funds. Find out which fund families are the best for no-load funds.
Pros and Cons of a Stock Fund
What are the pros and cons of a stock fund and should you invest in a stock fund? Whether you plan to buy a stock fund or you plan to buy individual stocks, you should become familiar with the pros and cons of a stock fund prior to investing.
What are the pros and cons of a stock fund and should you invest in a stock fund? Whether you plan to buy a stock fund or you plan to buy individual stocks, you should become familiar with the pros and cons of a stock fund prior to investing.
Bond Mutual Funds
Bond mutual funds are an excellent diversification tool for investors’ portfolios. Bond mutual funds come in many shapes and styles. Let’s start with five basic types of bond mutual funds.
Bond mutual funds are an excellent diversification tool for investors’ portfolios. Bond mutual funds come in many shapes and styles. Let’s start with five basic types of bond mutual funds.
Cheapest S&P 500 Funds
While cheaper doesn't necessarily mean better, you will find some of the cheapest S&P 500 funds that you can buy with $10,000 or less listed below.
While cheaper doesn't necessarily mean better, you will find some of the cheapest S&P 500 funds that you can buy with $10,000 or less listed below.
Best Bond Funds Rising Interest Rates
Which are the best bond mutual funds in a rising interest rate environment? Which bond funds do better against inflation? Knowing the basics on which funds perform best and which funds perform worst before and during higher interest rates and inflation is a crucial skill for the bond mutual fund investor.
Which are the best bond mutual funds in a rising interest rate environment? Which bond funds do better against inflation? Knowing the basics on which funds perform best and which funds perform worst before and during higher interest rates and inflation is a crucial skill for the bond mutual fund investor.
Expense Ratio
The percentage of fees paid to the mutual fund company to manage and operate the fund, including all administrative expenses and 12b-1 fees. The expense ratio excludes sales charges.
The percentage of fees paid to the mutual fund company to manage and operate the fund, including all administrative expenses and 12b-1 fees. The expense ratio excludes sales charges.
Short-Term Gains Distributions
While most people are painfully aware of short-term capital gains, short-term capital gains distributions are often a misunderstood -- and always a dreaded -- aspect of mutual fund investing. Financial advisors, sophisticated investors and novices alike, forget the rules of the unpleasant feature of mutual funds we know as short-term capital gains distributions.
While most people are painfully aware of short-term capital gains, short-term capital gains distributions are often a misunderstood -- and always a dreaded -- aspect of mutual fund investing. Financial advisors, sophisticated investors and novices alike, forget the rules of the unpleasant feature of mutual funds we know as short-term capital gains distributions.
Vanguard TIPS Interview
John Hollyer, co-manager of the Vanguard Inflation-Protected Securities Fund, delves into key issues related to TIPS and to the Vanguard Inflation-Protected Securities Fund.
John Hollyer, co-manager of the Vanguard Inflation-Protected Securities Fund, delves into key issues related to TIPS and to the Vanguard Inflation-Protected Securities Fund.
Standard Deviation
Standard deviation of historical mutual fund performance is used by investors in an attempt to predict a range of returns for various mutual funds.
Standard deviation of historical mutual fund performance is used by investors in an attempt to predict a range of returns for various mutual funds.
12b-1 Fee
A fee that is charged by some mutual funds, which is used to pay marketing, distribution, and service costs, and is paid to the broker. The Financial Industry Regulation Authority (FINRA) allows funds to charge as much as 1.00% annually as a 12b-1 fee.
A fee that is charged by some mutual funds, which is used to pay marketing, distribution, and service costs, and is paid to the broker. The Financial Industry Regulation Authority (FINRA) allows funds to charge as much as 1.00% annually as a 12b-1 fee.
What Is a Sector Fund?
A sector fund is a mutual fund or exchange-traded fund that concentrates its investments in a single sector of the market. If you invest in individual stocks and you’re uncomfortable investing in stocks within a particular sector, then you may benefit from sector funds. You can diversify your portfolio by adding the neglected sector via a sector fund.
A sector fund is a mutual fund or exchange-traded fund that concentrates its investments in a single sector of the market. If you invest in individual stocks and you’re uncomfortable investing in stocks within a particular sector, then you may benefit from sector funds. You can diversify your portfolio by adding the neglected sector via a sector fund.
CEFs
Despite the similarities of closed-end funds (CEFs) and mutual funds, they are two distinct types of investment companies. If you have read “What Is a Closed-End Fund?” and learned about the basics of the fund structure, then take a closer look at CEFs below.
Despite the similarities of closed-end funds (CEFs) and mutual funds, they are two distinct types of investment companies. If you have read “What Is a Closed-End Fund?” and learned about the basics of the fund structure, then take a closer look at CEFs below.
How to Invest Your 401(k)
There are many issues surrounding how to invest your assets. Typical considerations are how to invest in stocks, how to invest in bonds, how to invest in mutual funds and the “how to invest” list goes on. There are a plethora of “how to invest” considerations. If you’re planning for retirement, how to invest in mutual funds in your 401(k) is usually the top priority.
There are many issues surrounding how to invest your assets. Typical considerations are how to invest in stocks, how to invest in bonds, how to invest in mutual funds and the “how to invest” list goes on. There are a plethora of “how to invest” considerations. If you’re planning for retirement, how to invest in mutual funds in your 401(k) is usually the top priority.
Municipal Bond Funds
So you have heard a lot of talk about municipal bond funds and do the research to find a fund for you. But your research suggests that the yields of these municipal bond funds are less than many of their bond fund counterparts. So, why would you want to buy a municipal bond fund if you can buy another bond fund that has a higher yield?
So you have heard a lot of talk about municipal bond funds and do the research to find a fund for you. But your research suggests that the yields of these municipal bond funds are less than many of their bond fund counterparts. So, why would you want to buy a municipal bond fund if you can buy another bond fund that has a higher yield?
Interest Rate Risk
Interest rate risk is the risk of falling bond prices due to the rise in interest rates.
Interest rate risk is the risk of falling bond prices due to the rise in interest rates.
Cost Basis
Cost basis is the purchase price of a mutual fund (or other asset) plus reinvested dividends and reinvested capital gains distributions. The market value less the cost basis is the capital gain or capital loss.
Cost basis is the purchase price of a mutual fund (or other asset) plus reinvested dividends and reinvested capital gains distributions. The market value less the cost basis is the capital gain or capital loss.
Index Funds FAQ
Why invest in index funds? Learn about index funds and find out the primary reasons why index funds often outperform most actively-managed funds in the long run.
Why invest in index funds? Learn about index funds and find out the primary reasons why index funds often outperform most actively-managed funds in the long run.
Core and Satellite
Definition: Core and Satellite is a common and time-tested investment portfolio design that consists
Definition: Core and Satellite is a common and time-tested investment portfolio design that consists
Asset Allocation
Asset allocation describes how investment assets are dividend into the 3 basic investment types - stocks, bonds and cash - within an investment portfolio.
Asset allocation describes how investment assets are dividend into the 3 basic investment types - stocks, bonds and cash - within an investment portfolio.
Fund Categories
Mutual funds are organized into categories by asset type (stocks, bonds and cash) and then further categorized by style, objective or strategy. Learning how mutual funds are categorized helps an investor choose the best funds for asset allocation and diversification purposes.
Mutual funds are organized into categories by asset type (stocks, bonds and cash) and then further categorized by style, objective or strategy. Learning how mutual funds are categorized helps an investor choose the best funds for asset allocation and diversification purposes.
Target-Date Funds
Target-date funds are often thought of as “set it and forget it” funds. For example if you plan to retire in 20 years, you might buy a target-date fund that matches your time-frame -- a target of 20 years. As you approach your retirement date, the fund moves its allocation to more conservative mutual fund investments (holding bonds and cash) and away from riskier mutual funds investments (holding equities).
Target-date funds are often thought of as “set it and forget it” funds. For example if you plan to retire in 20 years, you might buy a target-date fund that matches your time-frame -- a target of 20 years. As you approach your retirement date, the fund moves its allocation to more conservative mutual fund investments (holding bonds and cash) and away from riskier mutual funds investments (holding equities).
Benefits & Risks of TIPS
Investors should be aware of the benefits and risks of TIPS. Vanguard's John Hollyer was kind enough to answer several questions for About.com regarding the benefits and risks of TIPS.
Investors should be aware of the benefits and risks of TIPS. Vanguard's John Hollyer was kind enough to answer several questions for About.com regarding the benefits and risks of TIPS.
Mutual Fund Prospectus
A mutual fund prospectus is to a mutual fund what an owner’s manual is to a car. If you want to learn more about what’s under the hood of your mutual fund, check out the prospectus. The mutual fund prospectus is a valuable tool that contains important information.
A mutual fund prospectus is to a mutual fund what an owner’s manual is to a car. If you want to learn more about what’s under the hood of your mutual fund, check out the prospectus. The mutual fund prospectus is a valuable tool that contains important information.
UITs
Unit investment trusts (UITs) may be the least understood, and certainly least utilized, of all of the US registered investment companies. What's the problem with UITs? Before answering the question, we need to understand the structure of UITs.
Unit investment trusts (UITs) may be the least understood, and certainly least utilized, of all of the US registered investment companies. What's the problem with UITs? Before answering the question, we need to understand the structure of UITs.
Fund Research Tools
Mutual fund research can be made easier with a good online research tool. Whether you are a beginner or a pro and if you are looking to buy the best mutual funds, review an existing fund, compare different funds or just trying to learn something new, these mutual fund research cites are among the best.
Mutual fund research can be made easier with a good online research tool. Whether you are a beginner or a pro and if you are looking to buy the best mutual funds, review an existing fund, compare different funds or just trying to learn something new, these mutual fund research cites are among the best.
Risk Tolerance
A key ingredient to successful investing is knowing yourself. Gauging your risk tolerance is a good way to help you determine how much risk you can tolerate in your portfolio of investments.
A key ingredient to successful investing is knowing yourself. Gauging your risk tolerance is a good way to help you determine how much risk you can tolerate in your portfolio of investments.
Load
A mutual fund load is a fee charged when an investor makes a transaction in fund shares. There are also funds that do not charge loads, which are known as “no-load” funds.
A mutual fund load is a fee charged when an investor makes a transaction in fund shares. There are also funds that do not charge loads, which are known as “no-load” funds.
Frontier Markets Introduction
You may have read that frontier markets are the next hot investment idea. You may have read that frontier markets offer more upside than their emerging market and developed market cousins. But what are these frontier markets, what are the risks of frontier markets, and how can you invest in these frontier markets?
You may have read that frontier markets are the next hot investment idea. You may have read that frontier markets offer more upside than their emerging market and developed market cousins. But what are these frontier markets, what are the risks of frontier markets, and how can you invest in these frontier markets?
Analyzing Performance
Past performance of a mutual fund may not be a guarantee of future results but if you know how to analyze performance--if you know what to look for and what to avoid--you can make better investment decisions.
Past performance of a mutual fund may not be a guarantee of future results but if you know how to analyze performance--if you know what to look for and what to avoid--you can make better investment decisions.
Top 10 Taxes
How do I reduce taxes on mutual funds? Which types of funds are best for taxable accounts? Why did I receive a 1099? Understanding mutual fund taxation will help you improve your overall returns by being a smarter investor.
How do I reduce taxes on mutual funds? Which types of funds are best for taxable accounts? Why did I receive a 1099? Understanding mutual fund taxation will help you improve your overall returns by being a smarter investor.
Before You Invest in Funds
Before you invest in mutual funds, learn more about the structure of the investment and the fees associated with the investment.
Before you invest in mutual funds, learn more about the structure of the investment and the fees associated with the investment.
Before You Buy an Index Fund
Before you buy an index fund, it is important to understand the definition of an index fund, the passive versus active management debate, and the difference between ETFs and mutual funds.
Before you buy an index fund, it is important to understand the definition of an index fund, the passive versus active management debate, and the difference between ETFs and mutual funds.
Index Funds Beat Actively-Managed
Why do index funds outperform actively-managed funds? Over long periods of time, index funds have higher returns than their actively-managed counterparts for several simple reasons.
Why do index funds outperform actively-managed funds? Over long periods of time, index funds have higher returns than their actively-managed counterparts for several simple reasons.
R-squared
R-squared (R2) is a statistical measure that investors can use to determine a particular investment's correlation with a given benchmark.
R-squared (R2) is a statistical measure that investors can use to determine a particular investment's correlation with a given benchmark.
Market Cap
What is market cap and how does it relate to mutual funds? Market cap refers to the equity capitalization of an individual stock. It is the price of a share of stock multiplied by the number of shares outstanding. Many equity mutual funds are categorized based on the average market capitalization of the stocks that the mutual funds own.
What is market cap and how does it relate to mutual funds? Market cap refers to the equity capitalization of an individual stock. It is the price of a share of stock multiplied by the number of shares outstanding. Many equity mutual funds are categorized based on the average market capitalization of the stocks that the mutual funds own.
American Funds
Since 1931, American Funds has been known as a conservative, value-oriented mutual fund company. American Funds is one of the three largest mutual fund families in the US.
Since 1931, American Funds has been known as a conservative, value-oriented mutual fund company. American Funds is one of the three largest mutual fund families in the US.
Reasons to Sell Your Fund
Pick up any financial magazine, peruse the money section of a newspaper, or search for mutual funds online and you will not have a problem finding a mutual fund to buy right now. There’s no shortage of “top mutual funds” lists. On the other hand, it can be no easy task to find an article, blog post or mutual fund sales person to provide information that will help you decide whether or not to sell your mutual fund. So, why should you sell your mutual fund?
Pick up any financial magazine, peruse the money section of a newspaper, or search for mutual funds online and you will not have a problem finding a mutual fund to buy right now. There’s no shortage of “top mutual funds” lists. On the other hand, it can be no easy task to find an article, blog post or mutual fund sales person to provide information that will help you decide whether or not to sell your mutual fund. So, why should you sell your mutual fund?
How Mutual Funds Work
The basic idea of how mutual funds work is straightforward. Investors pool their money and hire a portfolio manager to invest in a variety of investment securities. When an investor buys a mutual fund, their investment dollars are used to purchase new shares of the mutual fund.
The basic idea of how mutual funds work is straightforward. Investors pool their money and hire a portfolio manager to invest in a variety of investment securities. When an investor buys a mutual fund, their investment dollars are used to purchase new shares of the mutual fund.
Depreciating US Dollar
For those mutual fund investors who believe that the US dollar will lose ground against other currencies, how can you obtain an advantage? There is certainly more than one answer to this question. Let’s look at how a mutual fund investor can gain from a depreciating US dollar by investing in international mutual funds.
For those mutual fund investors who believe that the US dollar will lose ground against other currencies, how can you obtain an advantage? There is certainly more than one answer to this question. Let’s look at how a mutual fund investor can gain from a depreciating US dollar by investing in international mutual funds.
ETFs
: ETF is short for "Exchange-Traded Fund." An ETF holds a basket of securities and trades on a stock
: ETF is short for "Exchange-Traded Fund." An ETF holds a basket of securities and trades on a stock
Statistical Analysis
Statistical analysis of mutual funds requires a fundamental knowledge of quantitative measures, such as Beta, R-squared, Alpha, Sharpe Ratio, Expense Ratio, and Tax Cost Ratio. Learn more about statistical analysis and you can choose the best mutual funds.
Statistical analysis of mutual funds requires a fundamental knowledge of quantitative measures, such as Beta, R-squared, Alpha, Sharpe Ratio, Expense Ratio, and Tax Cost Ratio. Learn more about statistical analysis and you can choose the best mutual funds.
Total Stock Market Index Funds
What are total stock market index funds? Find out how to use total stock market index funds, which ones are the best and if you should use them.
What are total stock market index funds? Find out how to use total stock market index funds, which ones are the best and if you should use them.
5 Things to Know About Mutual Funds
There are a few key things every investor should know about mutual funds. Learn the 5 things to know about mutual funds.
There are a few key things every investor should know about mutual funds. Learn the 5 things to know about mutual funds.
Morningstar
Morningstar is best known as a mutual funds research company. But what exactly do they do?
Morningstar is best known as a mutual funds research company. But what exactly do they do?
130/30 Funds
130/30 funds are revolutionary -- or so say the marketers who explain the funds as a way to take advantage of the fund managers stock picking expertise. What are these 130/30 funds and should you buy one?
130/30 funds are revolutionary -- or so say the marketers who explain the funds as a way to take advantage of the fund managers stock picking expertise. What are these 130/30 funds and should you buy one?
Passively Managed Funds
Index funds are considered to be passively managed funds. The manager of an index fund tries to mimic the returns of the index it follows by purchasing all -- or almost all -- of the holdings in the index. Hundreds of market indexes can be invested in via mutual funds and exchange-traded funds.
Index funds are considered to be passively managed funds. The manager of an index fund tries to mimic the returns of the index it follows by purchasing all -- or almost all -- of the holdings in the index. Hundreds of market indexes can be invested in via mutual funds and exchange-traded funds.
Summary Prospectus
The summary prospectus rules require that funds provide investors with a brief summary (generally three to four pages) – in plain English – of the key information that will allow investors to make informed investment decisions.
The summary prospectus rules require that funds provide investors with a brief summary (generally three to four pages) – in plain English – of the key information that will allow investors to make informed investment decisions.
Target-Date Mutual Funds
If you are counting on target-date funds as a simple solution to your retirement investments, be careful. Just as with any investment, you need to do some homework first. All target-date funds are not all created equal.
If you are counting on target-date funds as a simple solution to your retirement investments, be careful. Just as with any investment, you need to do some homework first. All target-date funds are not all created equal.
NAV
NAV is an acronym for Net Asset Value. The NAV of a fund is the total value of the securities in the fund minus liabilities, divided by shares outstanding.
NAV is an acronym for Net Asset Value. The NAV of a fund is the total value of the securities in the fund minus liabilities, divided by shares outstanding.
Pitfalls of Mutual Funds
Whether you have made a thoughtful decision to invest in mutual funds or you are all but forced to invest in mutual funds (401k, 403b, or other retirement plans), you are bound to read about, hear about, and/or experience the pitfalls of mutual funds. So, let’s take a look at several pitfalls of mutual funds and what we can do to avoid them.
Whether you have made a thoughtful decision to invest in mutual funds or you are all but forced to invest in mutual funds (401k, 403b, or other retirement plans), you are bound to read about, hear about, and/or experience the pitfalls of mutual funds. So, let’s take a look at several pitfalls of mutual funds and what we can do to avoid them.
Sector Funds
Sector Funds focus on a specific industry, social objective or sector such as health care, real estate or technology.
Sector Funds focus on a specific industry, social objective or sector such as health care, real estate or technology.
Stock or Funds
Answering the question of whether to buy stocks of individual companies or buy stocks via mutual funds, takes an exploration of your objectives and your willingness to take risk. If you understand the risks and rewards of investing in stocks, and you have the ability and willingness to take risk, then the next step is to decide if you would like to buy stocks of individual companies or buy stocks via mutual funds.
Answering the question of whether to buy stocks of individual companies or buy stocks via mutual funds, takes an exploration of your objectives and your willingness to take risk. If you understand the risks and rewards of investing in stocks, and you have the ability and willingness to take risk, then the next step is to decide if you would like to buy stocks of individual companies or buy stocks via mutual funds.
How Bond Funds Work
Whether you are a beginner or a professional, understanding how bonds and bond mutual funds work can help investors understand other areas of finance and economics, such as stock investing and interest rates, and how they are all interrelated. Learn the basics on bonds and how bond funds work to become a better investor.
Whether you are a beginner or a professional, understanding how bonds and bond mutual funds work can help investors understand other areas of finance and economics, such as stock investing and interest rates, and how they are all interrelated. Learn the basics on bonds and how bond funds work to become a better investor.
Market Timing
Understanding the definition of market timing helps an investor determine if this strategy of buying and selling stocks or mutual funds is best for them.
Understanding the definition of market timing helps an investor determine if this strategy of buying and selling stocks or mutual funds is best for them.
Bond Immunization
An investor is interested in bond immunization if they would like to limit their interest rate risk.
An investor is interested in bond immunization if they would like to limit their interest rate risk.
Sharpe Ratio
Sharpe Ratio is a useful analytical tool for analyzing mutual funds. Investors who understand the definition and benefits of Sharpe Ratio in their fund research are enabled to build a better portfolio of mutual funds.
Sharpe Ratio is a useful analytical tool for analyzing mutual funds. Investors who understand the definition and benefits of Sharpe Ratio in their fund research are enabled to build a better portfolio of mutual funds.
Total Stock vs S&P 500
Which is best, a total stock market index or the S&P 500 Index? The answer depends upon the complimentary mutual funds or ETFs within the investor's portfolio. There are some mistakes to avoid in the total stock market index vs S&P 500 index debate. It is wise to compare and contrast the similarities and differences before investing.
Which is best, a total stock market index or the S&P 500 Index? The answer depends upon the complimentary mutual funds or ETFs within the investor's portfolio. There are some mistakes to avoid in the total stock market index vs S&P 500 index debate. It is wise to compare and contrast the similarities and differences before investing.
Mutual Fund Breakpoint
A discount based on the amount of money invested in a mutual fund that charges a load, or sales charge. The more money an investor commits to a particular mutual fund, or funds within the same fund family, the larger the discount on the sales charge.
A discount based on the amount of money invested in a mutual fund that charges a load, or sales charge. The more money an investor commits to a particular mutual fund, or funds within the same fund family, the larger the discount on the sales charge.
Pros of Mutual Funds
There are both pros of mutual funds and cons of mutual funds. Let’s take a look at a few of the pros of mutual funds and what they may offer the novice and experienced investor alike.
There are both pros of mutual funds and cons of mutual funds. Let’s take a look at a few of the pros of mutual funds and what they may offer the novice and experienced investor alike.
Market Capitalization
What is market capitalization and how does it relate to mutual funds? Market capitalization (also referred to as market cap) is the price of a share of stock multiplied by the number of shares outstanding. Many equity mutual funds are categorized based on the average market capitalization of the stocks that the mutual funds own.
What is market capitalization and how does it relate to mutual funds? Market capitalization (also referred to as market cap) is the price of a share of stock multiplied by the number of shares outstanding. Many equity mutual funds are categorized based on the average market capitalization of the stocks that the mutual funds own.
Frontier Market Risks
As a subset of emerging markets, frontier markets sound like an invitation to invest in countries that might offer an opportunity for fast growth. But these frontier markets do not come without risk. Of course, risks come with the territory of investing, but investors in frontier markets face additional risks due to lack of safeguards and infrastructure that investors find in more developed markets. So, what are the risks of investing in frontier markets?
As a subset of emerging markets, frontier markets sound like an invitation to invest in countries that might offer an opportunity for fast growth. But these frontier markets do not come without risk. Of course, risks come with the territory of investing, but investors in frontier markets face additional risks due to lack of safeguards and infrastructure that investors find in more developed markets. So, what are the risks of investing in frontier markets?
Money Management
Many investors don’t have the resources or the time to buy individual securities such as stocks and bonds. In order to profit from investing in individual securities, an investor not only needs resources and time, but a considerable amount of expertise.
Many investors don’t have the resources or the time to buy individual securities such as stocks and bonds. In order to profit from investing in individual securities, an investor not only needs resources and time, but a considerable amount of expertise.
Tax-Efficient Funds
The failure to understand and apply the basic concepts of tax-efficient investing is among the biggest mistakes made by investors. Learn how and where to use tax-efficient mutual funds.
The failure to understand and apply the basic concepts of tax-efficient investing is among the biggest mistakes made by investors. Learn how and where to use tax-efficient mutual funds.
Charitable Donations of Funds
If you have been generous enough to gift shares of your mutual fund to charity, then you may be curious of the tax implications. It is not safe to assume that you will receive a full federal tax deduction on the amount of your charitable donations of mutual funds.
If you have been generous enough to gift shares of your mutual fund to charity, then you may be curious of the tax implications. It is not safe to assume that you will receive a full federal tax deduction on the amount of your charitable donations of mutual funds.
Should You Buy Funds?
If you are seeking an answer to the question, “Should You Buy Mutual Funds,” then you will want to look at mutual funds from several different angles. Learn the pros and cons of funds and how to avoid the pitfalls of fund investing.
If you are seeking an answer to the question, “Should You Buy Mutual Funds,” then you will want to look at mutual funds from several different angles. Learn the pros and cons of funds and how to avoid the pitfalls of fund investing.
Growth Stocks
What are growth stocks? Which mutual funds are best for exposure to growth stocks? What is the best timing for investing? Mutual funds are an ideal means of investing in growth stocks for the average investor. Advanced investors can also use them as tools in their portfolios.
What are growth stocks? Which mutual funds are best for exposure to growth stocks? What is the best timing for investing? Mutual funds are an ideal means of investing in growth stocks for the average investor. Advanced investors can also use them as tools in their portfolios.
Mutual Fund Advisors Part One
If you have decided that you prefer to spend your time on other things than sifting through thousands of mutual funds, then it’s time to look for a mutual fund advisor. There are many things to consider before choosing a mutual fund advisor. In this segment, we’ll take a look at the fancy letters and titles that you will run across when searching for an advisor.
If you have decided that you prefer to spend your time on other things than sifting through thousands of mutual funds, then it’s time to look for a mutual fund advisor. There are many things to consider before choosing a mutual fund advisor. In this segment, we’ll take a look at the fancy letters and titles that you will run across when searching for an advisor.
Actively Managed Funds
The portfolio manager of an actively-managed fund tries to beat the market by picking and choosing investments.
The portfolio manager of an actively-managed fund tries to beat the market by picking and choosing investments.
Mutual Fund Myths
There are truths about mutual funds and there are myths about mutual funds. Learn more about both the truths and the myths of mutual funds.
There are truths about mutual funds and there are myths about mutual funds. Learn more about both the truths and the myths of mutual funds.
Life Cycle Funds
Life cycle funds are so aptly named because the idea is to invest in the funds through each cycle of your life. If you are investing in life cycle funds for retirement, buy a life cycle fund and hold it through the market’s ups and downs, letting the fund do all the work, throughout your retirement -- or so the theory goes.
Life cycle funds are so aptly named because the idea is to invest in the funds through each cycle of your life. If you are investing in life cycle funds for retirement, buy a life cycle fund and hold it through the market’s ups and downs, letting the fund do all the work, throughout your retirement -- or so the theory goes.
Mutual Fund Definition
The basic idea of how mutual funds work is straightforward. Investors pool their money and hire a portfolio manager to invest in a variety of investment securities.
The basic idea of how mutual funds work is straightforward. Investors pool their money and hire a portfolio manager to invest in a variety of investment securities.
Foreign Stock
A mutual fund in the category of Foreign Stock will invest primarily in stocks of companies outside of the United States. Be careful to understand that Foreign Stock has a different meaning than World Stock or Emerging Market Stock.
A mutual fund in the category of Foreign Stock will invest primarily in stocks of companies outside of the United States. Be careful to understand that Foreign Stock has a different meaning than World Stock or Emerging Market Stock.
absolute_return_fund_basics
What is an absolute return mutual fund? As it turns out, the answer to that question isn’t crystal clear. Each company that manages an absolute return mutual fund has a different definition based on the make-up of their fund. But the goal of every absolute return mutual fund is the same -- make money regardless of market conditions with lower volatility than traditional mutual funds.
What is an absolute return mutual fund? As it turns out, the answer to that question isn’t crystal clear. Each company that manages an absolute return mutual fund has a different definition based on the make-up of their fund. But the goal of every absolute return mutual fund is the same -- make money regardless of market conditions with lower volatility than traditional mutual funds.
Variety of Funds
There are many types and styles of mutual funds. There are stock funds, bond funds, money market funds and balanced funds. Mutual funds allow you to invest in the market whether you believe in active portfolio management (actively managed funds) or you prefer to buy a segment of the market with no interference from a manager (passive funds and index funds). The availability of different types of funds allows you to build a diversified portfolio at low cost and without much difficulty.
There are many types and styles of mutual funds. There are stock funds, bond funds, money market funds and balanced funds. Mutual funds allow you to invest in the market whether you believe in active portfolio management (actively managed funds) or you prefer to buy a segment of the market with no interference from a manager (passive funds and index funds). The availability of different types of funds allows you to build a diversified portfolio at low cost and without much difficulty.
TIPS vs. TIPS Funds
There are a couple of advantages of investing in TIPS mutual funds versus buying individual TIPS. For an investor who is subject to tax, direct holdings of TIPS are somewhat inefficient, because the Treasury characterizes as ordinary income both the real coupon income that’s earned and the adjustment for inflation, which is typically upward.
There are a couple of advantages of investing in TIPS mutual funds versus buying individual TIPS. For an investor who is subject to tax, direct holdings of TIPS are somewhat inefficient, because the Treasury characterizes as ordinary income both the real coupon income that’s earned and the adjustment for inflation, which is typically upward.
Manager Tenure
Manager tenure is a key decision factor in buying mutual funds. Don't make the mistake of overlooking manager tenure before investing in a mutual fund.
Manager tenure is a key decision factor in buying mutual funds. Don't make the mistake of overlooking manager tenure before investing in a mutual fund.
Top Performing Funds
Each and every year, generally in the first quarter of the year, top performing funds receive accolades from various media outlets. It’s hard to miss these rave reviews of top performing funds, as they are mentioned in nearly every major finance magazine and website. Whether it’s Morningstar’s “Fund Managers of the Year” or Barron’s “Top Fund Families,” the point is always the same. The point is to recognize the top performing funds. But should you purchase these top performing funds?
Each and every year, generally in the first quarter of the year, top performing funds receive accolades from various media outlets. It’s hard to miss these rave reviews of top performing funds, as they are mentioned in nearly every major finance magazine and website. Whether it’s Morningstar’s “Fund Managers of the Year” or Barron’s “Top Fund Families,” the point is always the same. The point is to recognize the top performing funds. But should you purchase these top performing funds?
Tax Cost Ratio
The mutual fund tax cost ratio measures the amount of a fund’s return that is lost due to taxes paid on mutual fund distributions.
The mutual fund tax cost ratio measures the amount of a fund’s return that is lost due to taxes paid on mutual fund distributions.
Benefits of TIPS
There are two main benefits of TIPS bonds. The most unique features of TIPS are that they’re essentially a Treasury (Treasuries dominate the U.S. dollar market for TIPS), and secondly they’re indexed to inflation, so two of the key risks for bond investors -- credit/default risk and inflation risk -- are addressed by these securities.
There are two main benefits of TIPS bonds. The most unique features of TIPS are that they’re essentially a Treasury (Treasuries dominate the U.S. dollar market for TIPS), and secondly they’re indexed to inflation, so two of the key risks for bond investors -- credit/default risk and inflation risk -- are addressed by these securities.
Cons of Mutual Funds
If you are a regular reader of the About.com mutual funds site, then you may have read about the so-called disadvantages of mutual funds. But what are the real cons of owning a mutual fund – the cons that are not as easily avoided or are impossible to avoid?
If you are a regular reader of the About.com mutual funds site, then you may have read about the so-called disadvantages of mutual funds. But what are the real cons of owning a mutual fund – the cons that are not as easily avoided or are impossible to avoid?
PIMCO
PIMCO is a global investment management firm with offices worldwide. PIMCO was founded in 1971 with $12 million in assets under management and has grown to manage over $1 trillion (as of December 31, 2009).
PIMCO is a global investment management firm with offices worldwide. PIMCO was founded in 1971 with $12 million in assets under management and has grown to manage over $1 trillion (as of December 31, 2009).
Dividends
What are dividends and how are mutual fund investors taxed on dividends? Understanding the basics of dividends and mutual fund taxation is essential to investing success.
What are dividends and how are mutual fund investors taxed on dividends? Understanding the basics of dividends and mutual fund taxation is essential to investing success.
Beta
A mutual fund investor can use beta in planning their fund selection to determine volatility of the fund and to compare its sensitivity in movement to the overall market.
A mutual fund investor can use beta in planning their fund selection to determine volatility of the fund and to compare its sensitivity in movement to the overall market.
Capital Gain Distribution
To help shareholders prepare for capital gain distributions, mutual fund companies generally post capital gain distribution estimates beginning in October. These capital gain distribution estimates can help mutual fund investors (who own funds held in taxable accounts) plan ahead for tax day.
To help shareholders prepare for capital gain distributions, mutual fund companies generally post capital gain distribution estimates beginning in October. These capital gain distribution estimates can help mutual fund investors (who own funds held in taxable accounts) plan ahead for tax day.
Bond Fund Types and Categories
What are the types of bond funds? How are bond mutual funds categorized? Bond mutual fund investing can appear complex but understanding the basics of bond categorization will help determine which bond fund type is best for you.
What are the types of bond funds? How are bond mutual funds categorized? Bond mutual fund investing can appear complex but understanding the basics of bond categorization will help determine which bond fund type is best for you.
Market Risk
There are several different types of risk associated with investing. All of these types of risk generally refer to the risk a particular investment or a group of investments will decline in value and are included under one overall risk, which is market risk.
There are several different types of risk associated with investing. All of these types of risk generally refer to the risk a particular investment or a group of investments will decline in value and are included under one overall risk, which is market risk.
John Hollyer's Bio
John W. Hollyer is a principal at Vanguard. He joined the company in 1989. Since 2003, he has led the Risk Management and Strategic Analysis Group.
John W. Hollyer is a principal at Vanguard. He joined the company in 1989. Since 2003, he has led the Risk Management and Strategic Analysis Group.
CDSC
Mutual fund B shares do not require front-end sales charges, but carry contingent deferred sales charges (CDSC) and have a higher 12b-1 fee (a 1% 12b-1 fee is common) than other mutual fund share classes.
Mutual fund B shares do not require front-end sales charges, but carry contingent deferred sales charges (CDSC) and have a higher 12b-1 fee (a 1% 12b-1 fee is common) than other mutual fund share classes.
S&P 500
The S&P 500 Index is a benchmark for the large cap segment of the US equity market. The index includes 500 US-based companies and covers approximately 75% of the US equity market.
The S&P 500 Index is a benchmark for the large cap segment of the US equity market. The index includes 500 US-based companies and covers approximately 75% of the US equity market.
Class A Shares
Class A shares generally have front-end sales charges (also known as a “load”). The load is paid to the advisor for buying the mutual fund on behalf of investors.
Class A shares generally have front-end sales charges (also known as a “load”). The load is paid to the advisor for buying the mutual fund on behalf of investors.
Asset Classes
Asset classes, with regard to investing, are the three basic types of assets - stocks, bonds and cash.
Asset classes, with regard to investing, are the three basic types of assets - stocks, bonds and cash.
Turnover Ratio
It is no coincidence that the mutual funds with the lowest turnover ratios generally produce higher average returns to the investor over time. Learn more about turnover ratio and become a better mutual fund investor.
It is no coincidence that the mutual funds with the lowest turnover ratios generally produce higher average returns to the investor over time. Learn more about turnover ratio and become a better mutual fund investor.
Buying TIPS Bonds
As part of an email interview with John Hollyer , co-manager of the Vanguard Inflation-Protected Securities
As part of an email interview with John Hollyer , co-manager of the Vanguard Inflation-Protected Securities
Vanguard
Chances are, if you are a mutual fund investor, you have come across Vanguard mutual funds. Vanguard, founded in 1975 by legendary investment industry spokesperson John Bogle, is known as a low cost, index mutual fund provider.
Chances are, if you are a mutual fund investor, you have come across Vanguard mutual funds. Vanguard, founded in 1975 by legendary investment industry spokesperson John Bogle, is known as a low cost, index mutual fund provider.
Large Cap
Large cap refers to a categorization of stocks based on market capitalization (number of shares outstanding multiplied by stock price).
Large cap refers to a categorization of stocks based on market capitalization (number of shares outstanding multiplied by stock price).
Vanguard TIPS Mutual Fund
As part of an email interview with John Hollyer, co-manager of the Vanguard Inflation-Protected Securities Fund, I asked, “How does the Vanguard Inflation-Protected Securities Fund differ from other TIPS funds?”
As part of an email interview with John Hollyer, co-manager of the Vanguard Inflation-Protected Securities Fund, I asked, “How does the Vanguard Inflation-Protected Securities Fund differ from other TIPS funds?”
Barclays Aggregate
The Barclays Capital Aggregate Bond Index is the benchmark for most bond funds traded in the US. What is the BarCap Aggregate and how can an investor benefit by using a total bond market fund?
The Barclays Capital Aggregate Bond Index is the benchmark for most bond funds traded in the US. What is the BarCap Aggregate and how can an investor benefit by using a total bond market fund?
Presidential Election Cycle
The Presidential Election Cycle is a market timing indicator for stock investors. History reveals there is some relevance to this stock market indicator but investors should be cautious in applying the Presidential Election Cycle to their investment strategies.
The Presidential Election Cycle is a market timing indicator for stock investors. History reveals there is some relevance to this stock market indicator but investors should be cautious in applying the Presidential Election Cycle to their investment strategies.
Morningstar Interview on 12b-1
Why do you have to pay those hidden fund fees known as 12b-1 fees? Some folks think these fees are no good, hidden fund fees that are unnecessary. There’s been so much press on these so-called hidden fund fees lately that I posed a few questions to Morningstar. I asked Russel Kinnel, director of fund research at Morningstar to weigh in on the argument.
Why do you have to pay those hidden fund fees known as 12b-1 fees? Some folks think these fees are no good, hidden fund fees that are unnecessary. There’s been so much press on these so-called hidden fund fees lately that I posed a few questions to Morningstar. I asked Russel Kinnel, director of fund research at Morningstar to weigh in on the argument.
Holdings
What are mutual fund holdings? Do holdings matter with mutual funds? How many holdings is ideal? The total number of holdings can give an investor a clue to future performance.
What are mutual fund holdings? Do holdings matter with mutual funds? How many holdings is ideal? The total number of holdings can give an investor a clue to future performance.
Balanced Funds
Balanced Funds are mutual funds that provide a combination (or balance) of underlying investment assets, such as stocks, bonds and cash.
Balanced Funds are mutual funds that provide a combination (or balance) of underlying investment assets, such as stocks, bonds and cash.
Transaction Fees
Many investments incur transaction fees when buying shares. For this reason, investors should be aware of these trading costs, especially when making frequent purchases.
Many investments incur transaction fees when buying shares. For this reason, investors should be aware of these trading costs, especially when making frequent purchases.
Mutual Funds vs. ETFs
A “Google search” for mutual funds vs. exchange-traded funds will lead you to plenty of sites outlining the pros and cons of mutual funds vs. exchange traded funds. If you’ve tuned into this debate regarding mutual funds vs. exchange-trades funds, then you may be left in a state of confusion when trying to decide between the two investment structures. How do you decide to invest in mutual funds vs. exchange-traded funds?
A “Google search” for mutual funds vs. exchange-traded funds will lead you to plenty of sites outlining the pros and cons of mutual funds vs. exchange traded funds. If you’ve tuned into this debate regarding mutual funds vs. exchange-trades funds, then you may be left in a state of confusion when trying to decide between the two investment structures. How do you decide to invest in mutual funds vs. exchange-traded funds?
Primer on the Falling Dollar
Budget deficits, interest rate differentials, and diversification of foreign currency reserves are several of the buzzwords and phrases associated with the volatility of the greenback. Do you think that the future of our beloved dollar is dismal at best? Maybe it’s time to learn how a US investor profits from the falling dollar.
Budget deficits, interest rate differentials, and diversification of foreign currency reserves are several of the buzzwords and phrases associated with the volatility of the greenback. Do you think that the future of our beloved dollar is dismal at best? Maybe it’s time to learn how a US investor profits from the falling dollar.
Correction
A correction is a market trend that all active investors should know how to recognize. It is important to understand the distinction between a correction and a bear market.
A correction is a market trend that all active investors should know how to recognize. It is important to understand the distinction between a correction and a bear market.
Alpha
Alpha can be used to measure the value added or subtracted by a portfolio manager. Investors who understand the definition and benefits of alpha can gain an edge in mutual fund selection.
Alpha can be used to measure the value added or subtracted by a portfolio manager. Investors who understand the definition and benefits of alpha can gain an edge in mutual fund selection.
Index Definition
You may have heard about index funds. But what is an index? What are examples of best known indexes?
You may have heard about index funds. But what is an index? What are examples of best known indexes?
Unit Investment Trusts
Unit investment trusts (UITs) may be the least understood, and certainly least utilized, of all of the US registered investment companies. What are these unit investment trusts?
Unit investment trusts (UITs) may be the least understood, and certainly least utilized, of all of the US registered investment companies. What are these unit investment trusts?
Derivatives
A derivative is a financial instrument that derives its value from an underlying asset such as a stock, bond or commodity.
A derivative is a financial instrument that derives its value from an underlying asset such as a stock, bond or commodity.
Finding a Fund Advisor
Before choosing your mutual fund advisor, it’s important that you understand the various advisors’ philosophies. These philosophies include investment viewpoints, client service attitude and financial planning values.
Before choosing your mutual fund advisor, it’s important that you understand the various advisors’ philosophies. These philosophies include investment viewpoints, client service attitude and financial planning values.
Efficient Markets Hypothesis
The Efficient Market Hypothesis (EMH) essentially says that all known information about investment securities, such as stocks, is already factored into the prices of those securities. Therefore no amount of analysis can give an investor an edge over other investors. But is this hypothesis true in application? Are there certain areas of the market that are more or less efficient than others? How can you use index funds to take advantage of EMH?
The Efficient Market Hypothesis (EMH) essentially says that all known information about investment securities, such as stocks, is already factored into the prices of those securities. Therefore no amount of analysis can give an investor an edge over other investors. But is this hypothesis true in application? Are there certain areas of the market that are more or less efficient than others? How can you use index funds to take advantage of EMH?
MSCI Index
What is the MSCI Index? There are many different variations of this foreign stock index. These indexes are followed by other acronyms, such as EAFE, ACWI, IL, DM and EM. What do they mean and how can investors use them?
What is the MSCI Index? There are many different variations of this foreign stock index. These indexes are followed by other acronyms, such as EAFE, ACWI, IL, DM and EM. What do they mean and how can investors use them?
Rebalancing
Rebalancing your investment portfolio is the best way to 'buy low and sell high.' All you need to do is learn the best strategies.
Rebalancing your investment portfolio is the best way to 'buy low and sell high.' All you need to do is learn the best strategies.
Dow Jones
What is the Dow Jones Industrial Average and why should investors care about it? Although this index only represents 30 large industrial companies, the Dow Jones index still has significant relevance.
What is the Dow Jones Industrial Average and why should investors care about it? Although this index only represents 30 large industrial companies, the Dow Jones index still has significant relevance.
Mutual Fund Class B Shares
Class B shares do not carry front-end sales charges, but carry a contingent deferred sales charge (CDSC) and a higher 12b-1 fee (a 12b-1 fee of 1% is common).
Class B shares do not carry front-end sales charges, but carry a contingent deferred sales charge (CDSC) and a higher 12b-1 fee (a 12b-1 fee of 1% is common).