Tag Archives: Mutual Fund

What are the Best Oil Mutual Funds?

Some people who want to invest in mutual funds are quite happy to invest in balanced funds that take in all manner of different companies. But others want to invest in specific funds with a theme, such as oil mutual funds for example. Oil mutual funds tend to be quite popular because their returns are generally rather good when compared to other funds.

If you are interested in this particular area, it is wise to do a spot of research to see what kinds of oil funds are out there to invest in. Obviously there are many of them and while we have provided a list of some of them below, this should not be treated as an exhaustive list. Indeed you should make your own decisions and look into each one carefully before investing. The same applies for looking at other oil mutual funds in case you prefer those you find elsewhere.

Vanguard Energy

If you want an average return of around 14% or more each year, this could be the ideal place to look. This is one oil fund that has weathered the storm of the recession rather well, even when other funds were struggling. This alone could give you serious reason to consider Vanguard.

Fidelity Select Energy Services

The idea with this fund is to get capital growth. If this is on the cards for you, explore it in more detail. It is a typical example of how an oil mutual fund has gone from strength to strength thanks to the increasing prices given to oil.

Invesco Energy

This is another oil mutual fund that has been progressing well. It didn’t do as well in 2011 as it has this year, but having said that it still outperformed many basic savings accounts, so you have to consider what to expect. It could be a good possibility for the year ahead.

ProFunds UltraSector Oil and Gas Investor

It may have a long title but the name of the game is to achieve a steady growth over time. And this particular mutual fund has managed to do just that, providing more than 9% in returns over the past decade.

Are you going to pick one or more mutual funds to invest in?

Of course the main idea is to spread your risk as much as possible. Thus you may wish to invest in more than one oil mutual fund if this is the area that concerns you. Consider how much you have to invest and what you expect to gain from that investment. This should help you work out whether you want to invest in more than one mutual fund and whether you want all of them to be involved in the oil industry.

Clearly many people pick oil mutual funds simply because they have the potential to deliver a reasonably reliable improvement each year. But regardless of your reasons to invest in them, the suggestions above should help you choose your ideal fund.

Low Minimum Mutual Funds to Consider Investing In

Are you looking to invest in some mutual funds for the future? Many people are, and yet the toughest problem of all is finding ones that are affordable. Even a cursory look will reveal plenty of mutual funds that require $1,000 and up to invest in.

If you need a much lower minimum fund to consider, perhaps these will be of use to you. Remember though that it is a good idea to look into all these funds in more detail before considering whether you should invest in them or not. Remember too that it’s not just a question of whether you are able to afford to invest in a particular fund – it’s a question of whether the fund is set out as you would like it to be.

American Funds American Mutual Fund Class A

This is a mutual fund with a very affordable $250 as the minimum investment you need to get through the door. It has performed well over the past year and is a large cap investment fund, so it might be worth a closer look if you want a super low investment amount to work with.

American Funds AMCAP Fund Class A

Here we have another fund that only requires a $250 minimum to get in. In common with the above fund it has done well during the last year, so it could be a good one to consider. This is a growth fund, whereas the one mentioned above is a value fund.

FAM Value Inv (Fenimore Asset Management)

Do you want the maximum number of $500 options to consider? Here is another one to add to your list. It is a blended fund and has risen by more than 12% in the past year.

American Funds EuroPacific Class A

If you feel that even $500 is a little too much to stretch to at the moment, you will be pleased to know you can invest in mutual funds for even less than this. How about trying $250 for example? In this case the fund has performed exceptionally well once again over the space of the last year, giving you more to think about if you want to keep your initial investment as low as possible.

American Funds New World Class A

One final suggestion for you here – and it also requires a minimum of just $250 to get started. As the name would suggest it points to a selection of new markets to invest in, and has performed well over the past year. Remember though that the long term is the idea for this fund, rather than a quick investment for quick profits.

So there you have it – a few suggestions worth exploring in more detail if you only want to sink a few hundred dollars into your first mutual fund. The more you learn and the more you know, the easier it will be to figure out which mutual fund will be the best one for you.

Expenses Involved with Mutual Funds

If you are considering getting involved with mutual funds you should be aware there will be expenses involved as well. Indeed if you aren’t careful you can end up with a mutual fund that doesn’t perform anywhere near as well as you thought it would – and it can all be down to excess expenses.

So let’s take a closer look at the expenses you should look out for.

Yearly fees on mutual funds

Each year you are part of a particular mutual fund you will pay a fee to stay in it. This fee can vary between separate funds so when you are looking for a suitable investment to make in the beginning, ensure you look at these fees and choose a high performing fund that keeps the yearly fees at a respectable low.

Loads for buying or selling the shares you hold in a fund

When you are searching for mutual funds to invest in, you will probably notice some of them are referred to as no load funds. In this sense a load refers to a charge levied on the fund, or more properly to shares held within a fund. A load is basically a transaction charge and it is well worth looking out for.

Since some mutual funds exist without these charges, it makes sense to ensure you choose a mutual fund that doesn’t add them on. It can save you a lot of money in both the short and the long term. The no load funds come directly from the fund company itself, whereas those offered with a load attached will generally be offered through a broker.

Look at the expense ratio

While some fees are applied directly to a mutual fund, such as those indicated above, others are not as easy to spot. Perhaps the best example of this is the expense ratio that is applied to every mutual fund around today.

The expense ratio will be expressed as a percentage. It is the amount of money that is deducted from the mutual fund’s earnings on an annual basis to make sure all operating expenses are paid for. There will be quite genuine operating expenses involved, such as the salaries of those who run the fund and administrative expenses as well. But of course the expense ratio can be much higher with some companies than it is with others, so watch out for this and compare one to another so you know what to expect.

Looking out for the items above should ensure you have a better chance of finding a good quality fund that pays out a healthy amount to its investors each year, without taking back huge amounts for itself.

It should also ensure you can narrow down the possibilities more quickly, so you can find a more suitable mutual fund for your requirements. Expenses can certainly climb considerably if you pick the wrong fund. However, pick the right one and you will benefit for a long time to come.

How to Find Top Performing Mutual Funds

If you want to invest in mutual funds, it makes sense that you’d want to invest in the ones that bring in the best performance. But how do you find them?

Fortunately you don’t have to resort to closing your eyes and sticking a pin in a list you have in front of you. There are ways you can make the job easier. Here are some suggestions.

Check out the fund manager

This is the most important aspect of all. If you only pick one thing to do, make it this. It is better to choose a good fund manager with a company you’ve never heard of than to choose a fund manager with no track record who works with a company that is a household name. In short, go with the fund manager and not the company.

Find the benchmark for the funds you are interested in

You need a benchmark in order to gauge how well – or badly – a particular fund is doing. The benchmark can vary depending on the specific funds you are looking at. For instance, if you want to invest in a stock mutual fund you would look closely at the S&P 500 Index.

Look for consistent returns

This is a good way to find funds that perform well over a longer period of time. This points to funds that can be relied upon to do well even when times are not as good as they might be. Of course you will have periods when any fund will do better or worse than it may do at other times. But you want to pick something that is more consistent than its counterparts. You want to avoid the funds that have a tendency to dip further than others do, in order to make the most of your investments.

Look for no load funds

This is another important aspect to consider. A ‘load’ is basically another word for a charge made for entering into a mutual fund. Hence where there is no load, there is no fee. This is good news for you because it means you will pay less over the long term. This automatically means you get a better performing mutual fund, simply because you will pay less than you would otherwise. Just imagine the difference when compared to a fund that requires you to pay fees and charges every year.

As you can see there are a number of ways to help you find top performing mutual funds. While the fund manager is the most important element of all, adding in the other elements certainly helps to narrow down the possibilities. This will leave you with only the best mutual funds to consider.

One final point – don’t assume you will find the top performing funds in a matter of minutes. This process can take some time to go through if you want to do it properly. Spending a little more time now will mean better profits later on.

Tips for Building a Solid Mutual Fund

If you’re thinking about building a mutual fund, it is well worth finding out as much as you can about it before you get started. One thing you should know is there are lots of options out there for building a mutual fund. You can choose different advisers or figure it all out on your own. You can use a systematic approach or simply ‘go with your gut’. Of course we wouldn’t recommend the second option, but one thing is for sure – you need a lot of knowledge to make an informed decision on what to buy and when.

Find a reputable fund manager with a good track record

Sure, you can figure it all out on your own. But there is a reason why some fund managers have had great success in this field – they know what they’re doing. Finding the best funds to get the best returns is a full time job, so instead of trying to figure it out in your spare time, rely on a full timer instead.

Look for an index fund

This is one of the most basic options available to you. However, don’t assume basic means uninteresting or unable to bring you rewards. The opposite is true. The index fund may not make as much for the adviser, but it stands to balance out the amount of risk for you. This means you’ll be able to stay safer and still stand a chance of getting a good return on your investment.

Watch out for the associated fees you’ll pay

Mutual funds mean fees – there are no two ways about it. But this doesn’t mean you have to settle for paying large fees on your funds. In fact if you do your research you can watch out for funds that have much lower fees overall than others. Crunch some numbers and compare funds and see which ones offer the best deal so you pay as little as possible.

Think about other investment types as well

Mutual funds are popular among Americans, and they’ve gotten more so over the years too. But while they are popular for good reason, they’re not the only type of investment out there. No matter how much or little risk you like to take with your investments, you should definitely consider balancing your mutual funds with one or two other types of investments as well. This will ensure any risk is balanced out – a good option since mutual funds don’t carry any kind of guarantee.

But perhaps the biggest and best tip is to know what you’re going into if you intend to build a mutual fund. Don’t just invest in one because you know a lot of other people who have done the same thing. Just because they’re good for others it doesn’t mean they’ll be good for you. They could be excellent, but only you can decide which ones to get and why – and how much you should invest in them as well.

What are Fidelity Mutual Funds?

Most Americans are familiar with the name Fidelity. It is the name of a private corporation offering a range of financial services. More than sixty years old, the corporation is known for providing North Americans with a huge range of products of all kinds, particularly mutual funds.

Fidelity mutual funds are investments offered specifically by this corporation. Since Fidelity is one of the biggest organizations of its kind in the world, it should not come as a surprise to learn it offers a wide selection of mutual funds. Indeed there are several hundred of them: each designed to appeal to a particular type of investor.

How can you find out more about Fidelity mutual funds?

The best place to go is their website. They have a dedicated section on mutual funds that provides you with all the information you will need. This includes funds that have four and five stars, as well as news and analysis on all the latest developments in their funds market.

The best word of advice to give here is to take your time exploring the website and finding out more about Fidelity as well. This will provide you with a good background to the corporation so you are able to find out as much as you can in advance of investing any money in a mutual fund.

How can you choose the best fund for your own needs from Fidelity?

Once you are on the main page for the mutual fund section of their website, you’ll see a link for Fidelity mutual funds. When you click on this the section will expand to provide you with several options. One of these is to browse their funds, and you can do this in a number of different ways.

For example you can look through the range of funds that are available. These include stock funds, bond funds, international funds and money market funds. You’ll find the majority – nearly half – are tied up with the stock market, while a quarter are bond funds.

You can also use a sliding scale that lets you gauge the balance you want to achieve, i.e. conservative growth or aggressive growth, plus other options in between. Alternatively simply search the portfolio from Fidelity by name. This is ideal if you have heard of a particular fund and you want to find it more quickly.

Is Fidelity the best place to go to when searching for a mutual fund to invest in?

There are other mutual fund providers you could go to, of course. Furthermore it is always advisable to research the market so you can find the best possible range of mutual funds on the market today.

What Kinds of Mutual Funds Can You Get?

Many people have heard of mutual funds. But even though they are often talked about as if they are all alike, nothing could be further from the truth. Mutual funds can be classified in all kinds of different ways, although there are several main kinds that can be noted to exist if you are a beginner. Here we will go through these types so you can delve into each of them in more detail.

Stock funds

If you are considering getting involved with stock funds you must remember they are better focused on for the long term. It would be unwise to assume you could get a good return over the course of a few months. We are all aware of stock market crashes that have occurred in the past. However, even with these crashes in mind, the overall trend for the value of stocks has still been on the rise.

One other point to remember is that this category of mutual funds is generally best if you are happy to take on a little more risk in the hope of gaining a bigger reward.

Bond funds

Those who feel more secure knowing they have a more reliable source of income will likely feel more confident investing in bond funds. Of course they come with risks, much like any other mutual fund, but they are greatly reduced when compared to the other types. One of the key risks is a potential rise in interest rates. This has the effect of reducing the value of the bonds, thus making them less successful.

Balanced funds

As the name would suggest, these are normally a balanced mix of both stocks and bonds. This might be suitable for you if you want to invest in both types but you want to keep them together in one mutual fund. Obviously it makes sense to identify exactly which types of stocks and bonds go to make up any specific mutual fund before you invest. And remember, there will be a degree of risk involved so bear this in mind as well.

Money market funds

This type of mutual fund traditionally carries a far lower risk of loss than the kinds of funds mentioned above. However this is tempered by the fact that the returns are usually lower than the others as well. It is the classic case of less risk, less reward. The other kinds of mutual funds offer a higher degree of risk, but if that risk pays off you can expect a higher return as well.

Understanding the differences – and choosing the best mutual funds for you

Everyone will have their own ideas as to which type of mutual fund will be best for their financial needs. Risk appetite, expectations and finances will all play a part, but it is wise to understand what options there are and which type of mutual fund will be the best choice. Once you know the options you can make an informed choice.

Ideas to Get Rich Quick When Investing

Everyone always tells you that investing takes time, and if you’re going to “go all in”, then you need to do it for the long haul. Still, many people have that small voice inside their heads that tells them there may be a way to “get rich quick” through investing in the right things. So, is it actually possible to get rich in a hurry through investing?

For some, the answer is yes. But this makes up a very small percentage of the population, and if you choose to try “get rich quick” schemes to make money fast, you may find yourself in over your head. Here are a few ways to make quick money investing without becoming a day trader.

Sock More Money Away

Sounds ridiculously simple, right? Well, believe it or not, setting aside a large chunk of your income (if you can afford it) is the first step to growing investments quickly. Think of it as seed money – sock away 25% of your income as soon as you get your paycheck and watch it pile up. Then, when you pass the $5000 mark, make an investment.

Don’t add it to an investment you already have; try something new instead. Think CD laddering, stocks, gold or silver, or even a mutual fund. Once you’ve done it, repeat the process with a different kind of investment. Before you know it, you’ll have a diverse portfolio of investments.

Try P2P Lending

One lesser-known (and slightly more risky) investment vehicle out there is online Peer-to-Peer (P2P) lending. Websites like Lending Club and Prosper use a bidding system in which multiple lenders (you and others) throw in money to fund loans for people who have created listings on the sites. People use these sites because they may have had trouble in the past qualifying for traditional bank loans like those offered by net loans. If you spread your money over many different loans, you will reduce your risk and still enjoy a high rate of return in a relatively short period of time.

Think About the Foreclosure Market

Don’t try this one cold. If you have a bit of real estate experience under your belt, then this is one way to grow investments fast. You’ll need a good amount of money saved to get into this market, and once you have it, you can attend bank or tax sales to score a property in need of a little TLC.

Before you try this method out, make sure you do your homework. It’s important to know the laws in your state of residence, the true costs of fixing up a property, and the money you’ll need to spend to get it re-sold. This includes any money you may need to spend on the mortgage while you’re waiting for a qualified buyer to come along. You can make more money by adding more space in your investment property and save money by doing it yourself. 

Remember, getting rich quickly is still a process. There are ways to make money faster than traditional long-term investments, but the risk is higher and you’ll need to watch your money like a hawk when you go all in.

 

Investment Tips – An Example Investment Plan

If you want to start putting money aside, but you’re oblivious to the stock market and you have no idea how a mutual fund works, don’t feel embarrassed. Many people throughout the country suffer from the same problem, and unless you’re employed as a financial advisor (or just really love to study money), you’re in good company.

There are simple ways to invest without breaking a sweat, and if you follow a few simple guidelines, you’ll be on your way to a sweet investment portfolio before you know it. Let’s take a look at an example investment plan to get you started.

First, Max Out Retirement

The single best thing you can do for yourself investment-wise is to sink the most money into your retirement plan that’s allowed by law. If you have a 401k and you’re not investing the maximum amount to meet your company match, then you’re leaving a ton of free money on the table.

Conversely, if you don’t have a company plan or you are self-employed, then get a Roth IRA or UTMA accounts and start socking money away. Put in enough each month to meet your annual limit, and do it every year to ensure you get the maximum retirement savings that you can swing.

Next, Beef Up Your Mortgage Payments

Investing in your abode is a great way to add a safety net for your family. Most people consider retirement a tripod – Social Security, your retirement savings, and your home. We all know that Social Security may not be around when we get old, so we’re not holding our breath. That’s why investing in your home and retirement is the most important way to secure your future.

At the time of this writing, mortgage interest rates are the lowest they’ve been since long-term mortgages were first established in the 1950s. This means that now is the perfect time to refinance and lock in a fixed-rate mortgage at a historically low amount. Then, once you’ve adjusted that interest, add just one extra payment to the principal every year. This is a great investment that will save you boatloads of cash as years wear on.

Then, Save for College

If your kids are depending on you to fund their education, investing in their future is a fantastic way to help. Every US state has some form of college savings plan, and most offer tax savings as a perk for contributing to one. Open a plan for your little ones, and invest in their future regularly.

Finally, Invest in Other Stuff

Once you’ve locked down your three primary investment goals for your life, you can sink your leftover money into different investment vehicles. Diversification is still the name of the game, and spreading your eggs over many different baskets is your best bet for maximizing returns. Find out about CD laddering, look into mutual funds, and pad your portfolio with blue-chip stocks and other safe vehicles in which you can park your money.

10 Tips to Succeed With Mutual Funds

Mutual funds are great long-term investments, but if you blindly pick one without researching what’s out there and carefully weighing your options, then you are setting yourself up for disappointment – and massive losses – down the road. You should keep a few things in mind to succeed with mutual funds, and following these 10 simple tips can help you pick a winner.

1.       Stick with no-load funds.

Many mutual funds come with fees that are levied any time a fund manager buys or sells a stock. If you opt for a no-load fund, you can sidestep these fees and put more money back in your pocket in the form of returns.

2.       Make sure there’s a low turnover rate.

Mutual funds incur fees whenever stocks are bought and sold. Lower turnover equals lower fees and lower capital gains taxes, too.

3.       Look for consistent returns.

You need to make sure the returns investments in the fund are receiving are consistent. We’re not talking sky-high returns – the key here is stability for the long haul.

4.       Keep cash reserves low.

If a mutual fund has a high cash reserve, then this means that your investment will suffer as a result. Cash is generally held back to pay for new investments and to pay off any investors that decide to jump ship and cash out their funds, which cuts into you profit potential. Opt instead for a mutual fund with a low cash reserve.

5.       Be aware of your tax burden.

According to the SEC, you are liable for paying capital gains taxes on a mutual fund. Funds are required to pay investors any stocks they sell for a profit as long as those stocks can’t be offset by a loss. You will be responsible for paying taxes on any distributions you receive from the fund – even if the fund itself is operating in the red.

6.       Don’t buy a new fund.

It’s important to purchase a mutual fund that had been around for a while. The long-term performance of brand new funds has not yet been established, so they’re more vulnerable to negative earnings.

7.       Buy a fund with lots of assets.

More assets equals greater security, plain and simple. The key to stability is diversification.

8.       Keep the turnover rate in mind.

A higher turnover of securities in a mutual fund will incur higher fees and taxes.

9.       See what services are available to you.

Many funds offer services to their investors, such as help lines, live chat, check-writing privileges, and other perks. Find out what’s available to you that can help you easily manage your account before you buy.

10.   Keep your overall portfolio in mind.

Before you invest in mutual funds, you should make sure they fit in with your overall investment strategy. If it doesn’t make financial sense to invest in a fund instead of another financial instrument, don’t do it. Talk to someone who specializes in security analysis and portfolio management.

The Average Returns to Expect on Mutual Funds

When you are deciding on a vehicle for investing your money, mutual funds may come up in conversation more often than not. Because the risk is spread out, the investment is perceived as safer than gambling on individual stocks. It’s also much more lucrative than squirreling away your hard-earned dollars in a low-interest-bearing savings account. If you use mutual funds as a long-term investment strategy, you can earn returns of up to 12%. However, it’s important to choose the right fund and watch it closely, because if you invest in a loser, you may wind up earning far less in interest.

Consistent Investment Strategy

The single best way to construct a safe, diversified investment portfolio is to make sure you pick a mutual fund with a manager that invests in the same things consistently. You also need to check on the manager’s investing track record. If your fund is designed for investment in particular classes of stocks, then you need to follow up to ensure that the manager is indeed sticking to the plan. If he doesn’t, then random picks and sporadic buying could jeopardize your long-term returns.

Pick a Winner

Sometimes the market as a whole is bad. Other times, the sector that your mutual fund owns stocks in may be having an off year. Neither case merits jumping ship. It’s better to weather economic dips and spikes such as these in favor of looking out for your long-term gains with a fund. On the other hand, if you have a mutual fund that lags behind similar funds substantially for more than one year, then you may have a problem. Keep a close eye on the fund, and be prepared to walk away if you think you may have a loser on your hands.

Watch the Management

Be aware of the fund manager’s activities at all times. Read your annual statements and check on the performance and the manger’s purchases occasionally. If management changes on you, then it may be time to keep a closer watch. You need to ensure that the new fund manager closely matches the old in investment choices if you fund has been doing well, otherwise you may be in store for a bumpy ride. Conversely, if your fund was tanking and management changes hands, give the new guy a shot before you decide to sell off.

Expenses Involved With Mutual Funds

When you’re in the market for a mutual fund, finding a fund with the lowest overhead is always a good idea. Selecting a no-load fund is a smart move because you will avoid fees incurred when stocks are bought and sold within the fund. There are, however, other fees and costs related to owning a mutual fund that you cannot sidestep, and understanding the true costs of owning a mutual fund is important so that you can calculate exactly how much your real return on investment will be.

Transaction Costs

When buying a mutual fund, you may encounter three types of transaction costs. You may pay brokerage commissions, a spread cost, and market impact costs. The amount of each cost is difficult to predict, so asking a financial professional about which of these costs your fund may have associated with it is a shrewd move before you buy.

Expense Ratio

A mutual fund’s expense ratio is a more well-known cost, because this fee is used to pay for the fund’s management and other costs incurred for marketing and distribution. It’s a continuous cost, and you can figure out what the amount will be for the fund you choose by reading the prospectus.

Cash Drag

The cash drag of a mutual fund is the amount of money that a fund manager must hold aside to keep the fund liquid to purchase stocks. It’s also used to pay off fund investors who choose to cash out. This puts a major dent in a fund’s performance if the stocks in the fund become more valuable and the amount is greater than the cash the fund manager has held back. Cash drag affects people who buy mutual funds for the long term, because the amount of cash held back could be used for more stocks in the fund, but instead, it is being kept aside for investors who may choose to cash out more quickly.

Taxes

As with all financial instruments, taxes are a necessary evil and a cost that must be factored in when selecting a mutual fund. If you buy a mutual fund that contains stocks that have already increased in value, then you run the risk of being subjected to capital gains taxes for these stocks. Therefore, you should speak with a tax professional prior to purchasing a mutual fund to determine whether you will need to pay these taxes, and what the cost will be in relation to your potential returns.

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