How To Pick A Mutual Fund
Mutual funds by definition are a mixed bag of stocks, bonds and a little cash. Their price per share is the NAV, Net Asset Value of the total amount of money in the mutual fund divided by the number of shares. They seek to be fully invested at all times.
The fund manager determines which stocks and bonds to buy and sell in order to give the greatest return to his shareholders. He is considered to be an expert in choosing stocks for appreciation of value and should be expected to give a better than average return. That's why he draws down a six-figure income.
You are encouraged to pick a fund that has your goal in mind. Is it considered conservative, speculative, income oriented, growth or some other category? Wouldn't you say one of the principle reasons was to have the greatest return on your money? Do you want an average return or do you want an above average return?
What is average? There is an index which you hear about on the news every day called the S&P500. Because it is composed of 500 different stocks it is broadly representative of the market as a whole and therefore called a market average or index. You certainly would want a fund that is doing better than average.
You are encouraged to read the prospectus. Did you realize that the day it is printed much of the information in it is over a year old? It is written for the regulators in Washington, not for investors. It is worthless. Throw it away.
There are load funds that charge a commission and no-load funds that do not charge commission. There is no proof that paying a commission will provide you with a better return. Buy your no-load funds direct from the fund or through a discount broker.
You are told to find a good fund manager. Various money magazines list them. Investor's Business Daily does a feature story on different fund managers several times each week. Check to see if his fund is outperforming the S&P during the last 12 months. There are very few fund managers who have a consistent record and even the best of them gets cold once in a while and has a losing streak. You want your money returning at maximum at all times so you can't stay with one manager when he is running cold. Change funds.
One of the Wall Street myths is that you should put your money into a "good" fund and let it stay there for years. This is promoted because mutual fund managers are compensated by the amount of money they have in the fund and not for performance of the fund.
So how do you pick a fund? Very simple. It must outperform the S&P500 Index. Any mutual fund manager who cannot beat a market average should not be holding your money. Check out your funds today.
Al Thomas' book, "If It Doesn't Go Up, Don't BuyIt!" has helped thousands of people make moneyand keep their profits with his simple 2-stepmethod. Read the first chapter athttp://www.mutualfundmagic.com and discover why he's the man that Wall Streetdoes not want you to know.
How to Pay Less and Get More: Discount Broker vs Professional
How do you invest? What do you really pay? At the end of the day, what are your real results? These are questions smart investors should be asking themselves (but usually don't). In this era of more fees, misc. charges, holding periods and back end redemptions, even at discount brokers, how are you really making out?
Take The Time
You must take the time once a month to review your investment portfolio. It won't take long - less than one hour, maybe 15 minutes.
Buying Stocks and the Importance of Correct Timing
An investor can find and research the best stock on the market, one with huge potential but if the general market indices are negative, it will most likely be the wrong time to buy. A stock with tremendous accelerating earnings, rising sales, an up-trending chart pattern and a strong industry group may sound excellent to buy but will mean absolutely nothing if the market is positioned to move in the opposite direction of your expectations. As soon as a stock is purchased, the time comes for an investor to make a decision to hold or to sell. If the position shows a profit, hold as your judgment is correct. If the position shows a loss, cut it quickly and don't rationalize the situation before it doubles in size. Timing will play an important role in determining if you are right or wrong.
The single most expensive stock market trades are those made with emotions, but, of course, you are not an emotional trader are you?
How to Evaluate Load vs. No Load Mutual Funds
If you have been dealing with mutual funds for any length of time, you undoubtedly have faced the question of which is better: Load Funds or No Load Funds. If you are new to investing, "load" simply refers to the commission paid to the broker selling the fund. "No load" means there is no commission on the purchase or sale.
The Shadow knows. There used to be a radio program called The Shadow where the hero, Lamont Cranston, the Shadow, would overcome the shadowy forces of doom by clouding the vision of those around him. "Who knows what evil lurks in the hearts of men" was their intro line. They were great shows and you can still find them on the Internet.
There is a current movie entitled "Eternal Sunshine of the Spotless Mind". It is about a man who has had a painful love affair and will do anything to rid his mind of those pain thoughts of a former love. He sees an advertisement that offers just such a service. It seems his former lover has the exact thoughts and she goes through the same treatment. Guess what? They meet again, do not recognize each other, and fall in love again.
Stock Market Diversification
In one of my previous articles (Investing in the stock market -9 powerful tips), tip number one was:
Attitude Is [Almost] Everything
I often play a little game with myself when I have to go shopping; to the post office or on other errands.
How to Make Big Money Safely in Stock Market
(1) Stock Market is Tough Place to Make Any Money Consistently
What is the Most Important Indicator of All?
Most stock market traders have a favorite technical indicator.
Yesterday I received my monthly issue of MONEY magazine. This issue has the special feature called "The Ultimate Investment Club" that highlights their picks for the top mutual fund managers. Let's see how their members made money for their shareholders.
Psychology ? How to Reduce Negative Thoughts Relating to Trading?
The thinking process of the brain relating to the psychology of trading involves:
Dispelling Illusions of the Stock Market
How can you dispel an illusion unless you look directly at it? The magician distracts the eye with one hand while he does his manipulation with the other. You are looking in the wrong place and not seeing what is actually happening.
What the Hell is a Stock option?
A 'stock option' is a contract between two parties giving the buyer (also known as the 'taker') the right, but not the obligation, to either buy or sell a specific quantity of shares at a pre-agreed price (known as the 'strike price' or 'exercise price') by a certain future 'expiry' date. There are two different types of options that can be traded, known as 'call options' and 'put options'.
Box Of Chocolates
Ever have one of those sample boxes of candy? Each little piece is beautifully wrapped in colorful foil or decorated with an interesting design. Taste just one. So good! One more. And another. Before you know it the box is empty. Nothing left.
Choosing a Stock Broker
If you were to find that you had some severe illness that required surgery, would you attempt to perform that surgery upon yourself? What if your car broke down and needed a valve job? Would you get out the Craftsman tool set you got for Christmas three years ago and start tinkering under the hood even though you know absolutely nothing about engines? Of course you wouldn't do either of these things because there are times in life when we know we must seek the assistance of a professional. So why is it that so many people try to make their own investment decisions without consulting a professional stock broker?
If you have been watching the stock market at all you are probably very confused. You are not alone. One day is a hundred points up for the DOW and the next a hundred down. What is going on? There are many stocks that are going up and unless you are in the right ones you will be left behind.
Shorting Stocks ? The Basics, Part I of II
What does it mean to short a stock?
A Good Fund Manager
Every Wall Street analyst, financial planner and broker will tell you that the right way to pick a mutual fund is find a good money manager of a fund that has a long time record.
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