Mutual funds are good options for American investors to meet their financial goals. These funds offer professional management and diversification of the funds invested. Mutual funds assets in 1990-2000 rose from 1.065 trillion to a whooping 6.965 trillion dollars. 10% Americans owned funds in 1980 and by 2000, the percentage increased to 49%.

What are Mutual funds?

A company dealing in mutual funds invests the money of several investors in bonds, stocks, securities, assets and several other short-term money-market instruments. The combined ‘holdings’ owned by the mutual fund are known as its portfolio. When you invest in a mutual fund you become a shareholder of the company. Each share in a mutual fund company is the representation of he investor’s proportionate ownership of the fund holdings and the income generated. You earn dividends when the mutual fund company earns a profit, however, your shares will decrease in value if it faces a loss. A professional investment manager does the buying and selling of securities for the growth of the fund.

Types of mutual funds:

Equity funds: These funds involve only common stock investments. They can earn a lot of profit, but are also very risky.

Fixed income funds: They include corporate and government securities. These funds offer fixed returns at a low risk.

Balanced funds: This is the combination of bonds and stocks with a low risk. However, the investment does not earn a lot through these funds.

How it works?

Mutual fund shares can be purchased from the company itself or a broker. There are secondary market investors also, like the New York Stock Exchange. Per share net asset value of the funds or NAV is the price that you pay for buying a mutual fund share. It also includes the shareholder fee that is imposed by the fund, at time of purchase. The best feature of mutual funds is that these shares are ‘redeemable’. You, as an investor, can sell your shares back to the broker. In order to accommodate new investors, mutual fund companies generally create new shares and sell them. They keep selling their shares continuously till they become large. Investment advisers act as separate entities and are responsible for managing the investment portfolio of the mutual funds. Investing in mutual funds tends to lower the risk factor because they are the result of diverse investments. Since someone else manages your investments, you need not worry about keeping constant tabs on the investment, though a periodical check enhances your personal book of accounts. Managing funds is the full time job of the fund manager and he is responsible for the performance and health of the investment.

The rate of returns in mutual funds is based on the increase or decrease of the value, during a specific period. Returns of a fund indicate the track record. It is important to remember that the past performance cannot guarantee future results.

As in the case of any investment or business, mutual funds also have risks associated with the returns. It is essential to set your financial goals and requirements, before investing in a mutual fund.

I’m limited to a handful of funds, a mix of the following. How would you distribute 100%* among these funds:

Inflation Protected bonds
High Yield (junk) bonds
Balanced bonds

Large-cap stocks “value”
Large-cap stocks “growth”
Large-cap stocks “blend”
Mid-cap stocks “blend”
Mid-cap stocks “growth”
Small-cap stocks “value”
Small-cap stocks “blend”
Foreign stocks
World stocks

I need insider info! Give it to me! Please!! (Just kidding SEC)

Thanks in advance – any advice is greatly appreciated.

*put a percentage from 0% to 100% next to each fund until you’ve “spent” 100%.

Best answer:

Answer by nk aka tswizzy
Look to invest in banks.
They’d hit an all time low and are bouncing back with vengeance.
They offer high yield’s are a relatively low risk investment.

Know better? Leave your own answer in the comments!

Best answer:

Answer by slvrsurfer764
depends on where you are…..I could double that in 10 months here in northern va

2 words sweat equity

What do you think? Answer below!

Penny Rich Stock Picks provides FREE stock picks for the day trader and long term invester alike. Our picks are undervalued and overperforming microcap stocks. Get into the stock market today! This is not a get rich quick shceme but you will make money! Sign up for our newsletter to get the daily picks!

Sign up for my newsletter here:

http://finance.groups.yahoo.com/group/Penny-Rich-Stock-Picks/

Duration : 0:0:49

[youtube ljaNlMYrO2s]

Duration : 0:2:3

[youtube YByD_22DQnQ]

Duration : 0:9:0

[youtube dd72Iy0r3wI]

Duration : 0:0:32

[youtube EIOinHAXjvo]

Duration : 0:1:44

[youtube OceKPt-3ATA]

Duration : 0:3:44

[youtube uwkiEYVY8Zo]

Duration : 0:10:59

[youtube 9bv4NuS3vIk]