Articles by Guru at 2 on ArticleSnatch.com

Money Market Mutual Funds

Thu, 31 Jul 2008 00:00:00 -0400

Everyone should be able to find some way to invest their money in such a way that they do not lose it. Investing money ensures participation in the economic growth and also contributing to the economy. One of the best ways to invest without losing is to invest in mutual funds. It provides safety as well as assures return. Of these, the most liquid and safe investment is in money market funds. Hardly any investor loses money in these funds. What is a Money-market fund? A money market fund is a type of mutual fund that is required by law to invest in low-risk securities. These funds have relatively low risks compared to other mutual funds and pay dividends that generally reflect short-term interest rates. However, unlike a "money market deposit account" at a bank, money market funds are not insured federally. Money market funds are regulated primarily under the Investment Company Act of 1940 and the rules adopted under that Act, particularly Rule 2a-7 under the Act. How do these funds give you money? **End Summary** Topics: Money market funds]]> net asset value (NAV)]]> mutual funds]]> treasury only funds]]> government only funds]]> prime funds]]> first-tier funds]]>]]> About the Author: ]]> This is one area that you can look forward to invest. However there are many more alternatives to invest. To know about investing in mutual funds visit Investing in Mutual Funds and to get an idea as to how mutual funds work visit Mutual Funds. Also visit Exchange Traded Funds to know about exchange traded funds

BALANCED MUTUAL FUNDS

Thu, 31 Jul 2008 00:00:00 -0400

Investors who need quick returns and at the same time need safety from market fluctuations should consider investing in ‘balanced mutual funds’. It removes the disadvantages and difficulties that lies in investing in stocks and bonds and invests in a portfolio of bonds and stocks depending upon the investors’ risk profile. Hence returns as well as income can be achieved at the same time by investing in balanced mutual funds. What is a ‘balanced mutual fund’? A Balanced fund is a mutual fund which invests in a balance of common stock, bonds and preferred stock with an objective of income provision and some capital appreciation with low risk. So investing in balanced mutual funds provides the returns of stock market as well as the safety and regular income of bonds. Balanced mutual funds are also called as ‘hybrid funds’ or ‘asset allocation funds’. How do you get the returns? Although mutual funds are better and safer places to invest than the stock market, they are also subject to the fluctuations of the market. But Balanced funds try to address this problem and provide a high and stable return. • These funds invest about 60-65% of their money in stocks. **End Summary** Topics: Balanced mutual funds]]> hybrid funds]]> asset allocation funds]]> portfolio]]> stocks]]> securities]]> bonds]]> volatility]]>]]> About the Author: ]]> Hence, hybrid funds are something that investors can look forward to invest. However there are many more alternatives to invest. To know about investing in mutual funds visit Investing in Mutual Funds and to get an idea as to how mutual funds work visit Mutual Funds. Also visit Exchange Traded Funds to know about exchange traded funds

BOND MUTUAL FUNDS

Tue, 29 Jul 2008 00:00:00 -0400

The IMF predicts the US economy to slow down. Inflation has increased manifold in several countries across the world. There is a possibility of deeper economic downturn. The stock markets of most of the countries have tumbled during recent times. During tough times such as these, where would you put your money? One possible place is bond mutual funds. As the name suggests, these funds invest in bonds and debt securities. These funds aim to protect the invested capital and at the same time ensure regular income from interest payments. Just like any other mutual fund, these funds too have a Net Asset Value (NAV) which is the value of each share of the mutual fund. It is nothing but what one must pay to get one share of the fund or what one gets when a share of the fund is sold. 5 reasons why one should invest in bond mutual funds: 1. They are a lot less riskier than stocks 2. They provide stability 3. They are diversified – the portfolio will be across many different bonds thereby reducing the risk of default and ensure regular payments. 4. **End Summary** Topics: Bond mutual funds]]> interest payments]]> net asset value]]> government bond funds]]> municipal bond funds]]> corporate bond funds]]> international bond funds]]> co]]>]]> About the Author: ]]> These are some of the funds that an investor can look forward to invest. However there are many more alternatives to invest. To know about investing in mutual funds visit Investing in Mutual Funds and to know how mutual funds work visit Mutual Funds. Exchange Traded Funds

INVESTING IN MUTUAL FUNDS FOR YOUNGSTERS

Thu, 24 Jul 2008 00:00:00 -0400

Youngsters, whose age is somewhere between 18 and 35 must look forward to invest in mutual funds. Retirement plans and pension plans need not be considered. They must think more aggressively. At the same time they must be careful not to lose out. Some of the possible types of funds that they can consider investing are described in this article. The Emerging Markets Funds Emerging markets funds invest in economies that grow very fast (like India, China, Brazil, Russia, Mexico etc.). These economies create wealth both at home and also for foreign investors. These funds have posted impressive returns. Many funds have given more than 50% return. However, in the current world economic scenario, such returns may not be possible consistently for a long time. But these funds tend to diversify their portfolio across different countries and mitigate several risk factors. Hence investing in emerging markets funds is a quick way to earn money. Small-cap and Mid-cap funds These funds are for those people who tend to take more risk than an average investor. Recent history says that the small-cap and mid-cap have consistently outperformed large-cap stocks. **End Summary** Topics: Emerging market funds]]> Target funds]]> small-cap]]> mid-cap]]> large-cap]]> mutual funds]]> fast returns]]> mutual funds]]>]]> About the Author: ]]> These are some of the funds that a young investor can look forward to invest. However there are many more alternatives to invest. To know about investing in mutual funds visit Investing in Mutual Funds and to get an idea as to how mutual funds work visit Mutual Funds

Investing in Mutual Funds

Mon, 14 Jul 2008 00:00:00 -0400

Investing in mutual funds of investment companies means the investors buy shares in these companies. The ownership is proportional to the number of shares purchased by the investor and the gains are divided proportionately. Mutual Funds Mutual funds are financial intermediaries that collect funds from individual investors and invest these funds in various kinds of securities and/or other assets. Investing in mutual funds provides the benefits of large-scale investing to the small investor. By investing in mutual funds of an investment company, the investor contributes to the pool of assets created by the investment company. The investor's claim in the portfolio established by the investment company is proportional to the amount invested. While all investment companies pool assets of individual investors, they also need to divide claims of those assets among those investors. The value of each share purchased by the investor is called the net asset value or NAV. Net asset value equals assets minus liabilities expressed on a per-share basis. Open-end and Closed-end Mutual Funds By investing in open-ended mutual funds, the investors have an option to "cash out" their shares at the net asset value at any time. They can also buy new shares. **End Summary** Topics: Mutual funds]]> investing in mutual funds]]> open-end mutual funds]]> closed-end mutual funds]]> net asset value]]> portfolio]]> large-scale investing]]>]]> About the Author: ]]> To know more about investing in mutual funds visit Investing in Mutual Funds and to understand how mutual funds work visit Mutual Funds

How do Mutual Funds work

Mon, 14 Jul 2008 00:00:00 -0400

Every Mutual Fund has a specified investment policy which will be described in the Mutual Fund’s prospectus. A family of Mutual Funds will be managed by an Asset Management Company. How Funds are sold Mutual Funds primarily depend upon individual agents and distribution companies to market their schemes to the investors. Nowadays, they also market their schemes directly. The individual agents who sell schemes of various Mutual Funds also act as financial advisors to many investors. Hence they are required to clear various examinations before acting as an agent. Many Mutual Funds prefer to deal with distribution agency than individual agents as it is easier to manage. These distribution agencies, with their highly qualified executives, will be able to offer better financial advice than individual agents to the investors. Nowadays, the sales officers and other employees of the investment companies directly approach the investors (particularly the high net worth individuals and corporate clients) to sell different schemes. However, most of the sales of Mutual Funds happen through other distribution route than from marketing directly. Investment Policies The Asset Management Company of a Mutual Funds family will collect funds from investors and charge a management fee for operating them. **End Summary** Topics: how do mutual funds work]]> agents]]> distribution agency]]> equity funds]]> debt funds]]> money market funds]]> index funds]]> balanced funds]]> flexible funds]]>]]> About the Author: ]]> For more information about how mutual funds work visit Mutual Funds and to know about investing in mutual funds visit Investing in Mutual Funds

Exchange Traded Funds

Mon, 14 Jul 2008 00:00:00 -0400

Exchange Traded Funds are investment vehicles that are traded in Stock Exchanges. They are traded just as stocks or bonds are traded. Exchange Traded Funds allow investors to trade index portfolios just as they do shares of stock. Exchange Traded Funds can be traded throughout the day unlike open-ended mutual funds which can be traded only at the end of the day when net asset value is calculated. Moreover, the Exchange Traded Funds can be sold short or purchased on margin. Exchange Traded Funds also offer potential tax advantage over mutual funds. The capital gains tax that results when the fund sells securities to meet the redemptions made by investors are passed through to the remaining investors of the mutual fund. In case of Exchange Traded Funds, investors sell their shares to other investors. Therefore the fund need not sell securities. Hence there will be no capital gains tax incurred by the fund. Large investors have the ability to redeem Exchange Traded Funds for a portfolio of stocks comprising the index or exchange a portfolio of stocks for shares in the corresponding Exchange Traded Funds. **End Summary** Topics: exchange traded funds]]> tax advantage]]> index portfolios]]> large traders]]> arbitrage opportunities]]> no-load funds]]>]]> About the Author: ]]> For more information about exchange traded funds visit Exchange Traded Funds and to know about investing in mutual funds visit Investing in Mutual Funds