I am beginning mutual funds investment: Your advice ?

Question

I am beginning mutual funds investment: Your advice ?

Answer 1

I congratulate on your decision to begin investing. I think the sooner you start the better it is.



However, I am not a big fan of mutual funds. For once, most of the mutual funds will lag behind an index fund after factoring in for management expenses. Second, I think you could do a much better job investing for your self directly in the stock market provided you have done enough research.



So I would say, index funds are the best way to go since they offer better returns than mutual funds. In the mean time, read read read to find out more about the stock market.



Remember, the stock market is the ONLY market where buyers run for the exits when there is a sale (refering to the corrections, drops, etc). So being a contrarian would benefit you.

Answer 2

There are many different mutual funds to invest in. You need to do your own research and find a company that you like and a fund that you like and meets your risk levels. There are many different type of funds, such as sector funds, growth funds, value funds, bond funds, index funds and more. There are also things called loaded and no load funds. Be careful here. No load funds are typically best because they do not charge a fee just to invest. Loaded funds charge a fee, either up front (front loaded) or when you sell (back loaded). The purpose of the load is to increase profits of the company and to encourage investors to stay invested for the long term. Results are not uniform among loaded and no load funds. There are many places to start. First since you have not invested yet, your first investment needs to be an IRA. Good news is that you have until 15 April to fund a 2007 IRA. One thing you can do to get started sooner rather than later is to find an index fund from one of the major mutual fund companies. That will get you started and you can spend more time doing research. You can find good reference material online and in various personal investing periodicals. Good luck and keep saving!

Answer 3

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Answer 4

dont invest , trade

use charts



more on my blog

Answer 5

Hi,



There are thousands of mutual funds - 99% of them do not make money because your profits are drained away by the extra charges. A mutual find just buys a basket of stocks and if they are lucky, the fund makes money but again the owners take most of the profits and leave just the dregs. Try Vanguard's index funds. They perform fairly well.



The best software is Vector Vest if you can afford it.



Here is a free Web site for charting stocks: (http://www.incrediblecharts.com/).



First of all, stay away from "professional brokers" and tips coming to you via e-mail or friends and acquaintances.



Hey! They will say anything to get you to buy their junk. If it's too good to be true, it is.



Remember this, they are just sales people trying to sell you what their firm is pushing. They are not security analysts or financial planners, not even financial advisers. Trust me, I know from experience that they cannot be trusted especially with a million dollars. You risk losing it all. A million dollar account is known as a "whale" and they would love to get their greedy little paws on it and suck it dry. They just want to make commissions on what they buy and sell for the suckers, err...clients..



Risk avoidance is the name of the game.



Remember, the harder I work, the luckier I get.



Penny stocks are great and speculative, but I would avoid the ones under a dollar a share. For example, Best Buy started at less than $5. So there are some good companies, but it takes a lot of digging to find the good ones. You are looking for companies with good earnings, little debt, low capitalization, and good P/Es. For stocks under $5, very few will meet these requirements.



Stay away from the pharms unless they have patented drugs - do not invest in generic pharms, no growth there.



Check out which business sectors are the most popular and invest in the companies in those sectors. The number one, two and three are: technology, health care, and cyclicals (retail). These change every few months.



Watch CNBC, but don't pay too much attention to the talking heads, except for Jim Cramer, the wild man - but he tries to teach you how to invest and has some great advice.



Get Jim Cramer's Real Money: Sane Investing in an Insane World by James J. Cramer



Listen to Jim Cramer on CNBC.com



Go to Clearstation for quotes and tutorials on investing at (http://clearstation.etrade.com/). Sign up is free. Look up a few stocks. Do their tutorials.



Get this book: Value Investing: From Graham to Buffett and Beyond (Wiley Finance) by Bruce C. N. Greenwald, Judd Kahn, Paul D. Sonkin, and Michael van Biema.



Another good book: The Motley Fool Investment Guide for Teens: 8 Steps to Having More Money Than Your Parents Ever Dreamed Of (Motley Fool) by David Gardner, Tom Gardner, and Selena Maranjian



Jim Cramer's Mad Money: Watch TV, Get Rich by James J. Cramer and Cliff Mason



I Want to Make Money in the Stock Market: Learn to Begin Investing Without Losing Your Life Savings! by Chris M. Hart\



Sensible Stock Investing: How to Pick, Value, and Manage Stocks by David P. Van Knapp



Stock Investing For Dummies (For Dummies (Business & Personal Finance)) by Paul Mladjenovic



All About Stock Market Strategies : The Easy Way To Get Started by David Brown and Kassandra Bentley



The Motley Fool Investment Guide and their Web site (http://www.fool.com/).



The Little Black Book of Microcap Investing: Beat the Market with NASDAQ/AMEX Microcap Stocks, OTCBB Penny Stocks, and Pink Sheet Stocks by Dan Holtzclaw



How To Make Money In Stocks: A Winning System in Good Times or Bad, 3rd Edition by William J. O'Neil



Trading for a Living: Psychology, Trading Tactics, Money Management by Alexander Elder



Big Trends in Trading: Strategies to Master Major Market Moves (A Marketplace Book) by Price Headley



Extraordinary Popular Delusions & the Madness of Crowds (Paperback)

by Charles Mackay (Author), Andrew Tobias (Foreword) This book talks about the Tulip craze in Holland where people would mortgage their homes to buy Tulip bulbs. Same thing happened in 2001 - 2002 with the Internet bubble that brought the stock market to its knees. The dot com companies were the Tulip bulbs.



Buy Investors Business Daily. It has lots of tutorials and I like it better than the stodgy Wall St Journal.



Money Game by Adam Smith



Common Stocks and Uncommon Profits and Other Writings (Wiley Investment Classics) (Hardcover)

by Philip A. Fisher. Recommended by Warren Buffet who took $100,000 and grew it to $34 billion!



Value Investing with the Masters by Kirk Kazanjian



Valuegrowth Investing by Glen Arnold



The 5 Keys to Value Investing by J. Dennis Jean-Jacques



The Intelligent Investor Rev Ed. (Collins Business Essentials) by Benjamin Graham. Warren Buffet was his student at Columbia.



The Money Masters by John Train



The Bogleheads' Guide to Investing by Taylor Larimore



Common Sense on Mutual Funds: New Imperatives for the Intelligent Investor by John C. Bogle



Why Smart People Make Big Money Mistakes And How To Correct Them: Lessons From The New Science Of Behavioral Economics by Gary Belsky



Rule #1: The Simple Strategy for Successful Investing in Only 15 Minutes a Week! by Phil Town . See his Web site at (http://www.ruleoneinvestor.com/). Free sign-up. I got the book at the library.



Listen. You don't have to spend a lot of money on these books - most can be found at your library and those that your library doesn't have they can usually get from other libraries in your state.



Most of these books talk about stock and mutual fund investing, but for a good introduction to other forms of investing Gerald Appel has a great book called Opportunity Investing - How to Profit When Stock Advance, Stocks decline, Inflation Run Rampant, Prices fall, Oil Prices Hit the Roof and Every Time In Between.



First, Break All the Rules: What the World's Greatest Managers Do Differently by Marcus Buckingham and Curt Coffman Not a book on investing, but it's a nice segue into the next book.



Now, Discover Your Strengths by Marcus Buckingham and Donald O. Clifton



Go Put Your Strengths to Work: 6 Powerful Steps to Achieve Outstanding Performance by Marcus Buckingham



Finding your strengths is important when investing. These books teach you to build on your strengths, what you a good at. Everyone is good or passionate about something. Why not get better at what you are good at?



Another good book is: Opportunity Investing: How To Profit When Stocks Advance, Stocks Decline, Inflation Runs Rampant, Prices Fall, Oil Prices Hit the Roof, ... and Every Time in Between (Hardcover)

by Gerald Appel



Most mutual funds do not even keep up the the return on the S&P. That's like 99% of them.



Vanguard Index funds are a no brainer.



A CD is better than a savings account. They range from six months to several years. You cannot touch your money tho until the time limit is up.



Check out this Web site on Direct Investment Plans where you can buy shares directly from companies: (http://www.fool.com/School/DRIPs.htm). Usually no fees and you can buy one share at a time.



Bonds are probably the safest. You might try a bond fund. They might return 5 or 6 percent. At 5% a million would return $50,000 a year - not a bad income. Remember, you have to pay taxes on the $50,000.



There are also municipal bonds and the income from them is taxfree especially if you buy them in a state that offers them, but they only pay about 3%, but it's mostly taxfree.



Kindest Personal Regards,



Walt Brown

Site Build It Certified Webmaster

[e-mail]



P.S. This is a life-long learning process. Reading these books and applying the rules to analyzing stocks that may be good It takes time. Be patient and keep reading and listening.



P.P.S. Internet has lots of good stuff, for example (http://stockcharts.com/school/doku.php?id=chart_school:technical_indicators:moving_average_conve

Stockcharts.com is very good and their discussion of MACD is one of the best, barring its originator, Gerald Apple, but now we are getting into Technical Analysis and that is not for beginners.

Answer 6

Its value is dependent on Share market but less risky than share market.

Answer 7

Mutual funds are not that risky if you know what you are looking for. First LONG TERM performance 5-10 year time ond LOW expense fees (anything1% or under) third NO LOAD funds (meaning they charge you for buying or selling them) fourth some have high initial investments but a lot of good ones are under $,000. Finally think GLOBALLY do not pick a single country/sector unless you are investing in more than one different mutual fund.

Answer 8

A mutual fund is basically people allowing somebody, in this case a mutual fund advisor, to do the investing for them. "Here's some money, invest it for me."



Find out the benchmark for India. In the U.S., the benchmark is the SP 500, which only 20% of the mutual funds out there have been able to beat the SP 500 over the long haul. See how well the mutual funds you are looking at stack up to the common benchmark. You want a mutual fund that has met or beat that benchmark. If non of those mutual funds have beat the benchmark over the long hail, see if you can invest in the benchmark itself.

Answer 9

Main thing you should Know to buy a mutal fund is you should not buy when the prices are at the top. Buy only when the prices are alt the boottom or wait for that.

Answer 10

Hi. gr8 to hear to your decision!! investing in stock market is always a double minded thing for beginners. well, i appreciate that u took mutual funds option rather than stock market directly. There is low risk in investing in Mutual funds than stock market. the thing is,you must choose a good fund,second is you must have to be a long term investor. i ll give you advise to start S.I.P(Systematic Investment Plan) on monthly basis. so,you can watch your money's growth as well as you ll earn lots of experience to how to watch & where to invest. Meanwhile,u can contact me on this topic anytime. Happy Investing!!!

Answer 11

Hi, my first investment was a mutual fund at Citibank when I was in college. I purchase a balanced fund because it's lower in risk since I was a newbie. It made me some money. When I needed the money, I realized that I had to pay over 5% in fees to withdrawl the money on top of the management fee that the fund charges. That's where Citibank makes the money. Then I started research on fees and performance. I found out that you can buy direct and pay no fee. The fund company makes money from just managing the fund.

My advise is do your research online (free) at morningstar.com or Yahoo's investment site. Look for No-Load funds with good 3 and 5 year returns compare to it's peers. Invesco, Vanguard, T-Rowe Price, and TIAA-CREF are among my favorites. I recommend something that's conservative to start. I put my ex-wife's money into a mutal fund and made money years ago. She was happy and didn't say much. When she lose about 5 to 10%, she wants out. That's bad investment. There is always up and down especially in investing. No risk = No reward.

People always do the opposite of what they should do.

To save more money, you can buy Index funds because they don't require an active fund manager. All the money are link to a specific index. It's a learning curve, go slowly and ask more specific questions.



Do you research and use them. Charts are my favorite, use moving averages. Buy low and sell high. Don't be too greedy.

Answer 12

Did the mutual fund thing earlier in life. I was very unhappy with those fees and the return on my money. I also find nothing good about these funds and the people who run them. Some funds invest in good companies only too return so little to its mutual fund holder. My advise to you is stick with some good growth stocks that pay a nice dividend . In the long run you will be allot happier.

Answer 13

A mutual fund is a collection of securities, stocks or bonds usually managed by a third party (not your broker). Usually these mutual funds are run by large sophisticated organizations like Franklin or Janus. The prices of all the individual securities adds up every day and the mutual fund is priced. You can get more information on mutual funds by looking at Morningstar.com.

Answer 14

Mutual furnds are not risky. Share market is risky. MF willl invest your money in share market also.

Contact any MF, broker, sub broker, bank etc. Make payment by cheque only. You will get statements of units alloted you. You can sell any time within 3-4 days.

Best wishes for high profit in advance.

Invest regulary.

Answer 15

Faye, where is your answer?

We are waiting for your smart answer.

Thanks Faye.