Ulli G. Niemann asked:


With the internet such a huge part of our daily lives, many investors have access to a wide range of instant investment information.

Whether you’re into stocks, bonds, mutual funds, futures or options, there are tons of electronic investment newsletters offering to turn your small stake into a giant fortune. All you need to do is subscribe and watch your portfolio soar.

Yeah, right!

As a practicing investment advisor specializing in no load mutual funds, I have received my share of e-mails from disillusioned subscribers wanting to know how to better evaluate newsletter services.

While there are no absolutes, I can give you a few pointers that might help you make a better decision:

1. Stay away from the most obvious hype. Ads promising to turn your $10,000 into $1 million in 2 years by buying this incredible stock or hot commodity are not promoting investing — they are selling gambling. Follow the “If it sounds too good to be true, it usually is” rule.

2. Most mutual fund newsletters won’t make those outlandish claims, but some of them are still pushing the truth as far as they can. So try to get a free issue or two to examine. If you can’t get a sample, check if they have a trial period? How about a money back guarantee? If not, pay with your credit card. These days you’re pretty well protected by this payment method even if the newsletter doesn’t offer a satisfaction guarantee.

3. Consider the editor as well as the disclaimer notes. Is he or she only publishing a newsletter? Or is he also an investment advisor with a practice?

Why would that last point matter? I may be biased, but I believe that you get far better advice from a writer who also is in the trenches every day investing their own as well as their clients’ portfolios. They would have far better insights as to what works and what doesn’t than someone who has the theory down but no practical experience.

4. Look at the investment recommendations. Are they suggesting you buy into a certain orientation such as mid cap, small cap or large value? Or are they picking specific investments based on a variety of technical indicators?

In my no-load mutual fund practice I use specific recommendations, even for my free newsletter subscribers. They are first based on my trend tracking indicator giving us the green light and secondarily on the selection of mutual funds based on momentum analysis.

The more specific the recommendations, the better, because that allows you to follow along either just on paper (which you should do at first) or with your actual portfolio.

5. Are they recommending when to sell a mutual fund either because of gains or to limit your losses? This to me is the most important issue. If there is no plan in place for getting out, how will you ever know when to sell? This has been the greatest downfall of most publishers (and investors!) since the bear market of 2000 — not selling even if market conditions dictate it would be in your best interest to do so.

The advice of most newsletter services can make you money in bull markets. However, with the continuation of the bear market still a distinct possibility, be sure to look at any newsletter’s investment advice record since 2000.

For many people investing is an emotional issue. The pendulum swings between fear of loss and greed for greater returns. If a complete methodology for buying and selling is offered in a newsletter, such as one I advocate, be sure that it fits your emotional make up.

There is no sense in following an investment approach, which may have merits, if it means sleepless nights for you. You won’t stick with it for the long term — and long-term investing is essential for making your portfolio grow and prosper.

So, the bottom line is to look for a newsletter that:

* does not promise the moon,

* has a track record through up and down markets, and

* recommends an approach that not only is compatible for your investment style but also has an exit strategy so you can capitalize on your gains — in the bank, not only on paper.

Following these guidelines may not make you rich, but it will help you avoid some bad advice.



EVAN

Sacha Tarkovsky asked:


Mutual funds overall return poor results. A good one may return 10 – 12 compounded but with inflation, that’s not much and on the risk side 30% losses or more can occur and they can last for years!

Fact is most don’t even out perform the index, there are better alternatives with lower risk and higher profit potential and here we will look at one of them.

You won’t be surprised to learn that one is property but:

Here we are going to look at a high return low risk overseas market, where rewards are great risk low and just as importantly prices are cheap making the investment affordable to all investors.

Would you like up to 30% or more annual growth with low risk?

Most investors would and the market we are referring to here is a favorite of American and European investors - Costa Rica.

Consider these advantages:

A $30,000 investment in the popular resort of Jaco has increased in value in just 15 years to around $800,000!

What mutual fund can offer these returns?

Not many, but just as importantly property prices have risen steadily throughout the period with little downside volatility.

Why is the potential so good?

Quite simply ocean front property is up to 70% cheaper in Costa Rica than in the southern US states, so it offers an affordable alternative just a 3 hour direct flight form the US, in one of the most stable and beautiful countries on earth.

But it gets better!

Unlike a mutual fund, this mutual fund alternative offers you something more:

You can actually enjoy it!

You can have a holiday home that is an appreciating liquid asset, go there whenever you wish and when you are not there, you can earn an extra income from the booming rental market.

Is it easy to do?

Yes and there are many realtor’s who will advice you on the best deals and the best areas to buy in, which will hold or increase in value and prices are a lot cheaper than many people believe.

Also this investment offers the following benefits:

- Investing is made easy by the government

- Its extremely tax efficient

- Property taxes are very low

- You get the same legal rights as residents

If you want a high return investment which offers a great alternative to mutual funds and which you can also enjoy, make a secondary income from renting, then Costa Rica property offers you this and much more.

Its a lot cheaper and easier to do than many people believe, so make your mutual fund manager green with envy, with an investment that offers lower risk and higher rewards and you can enjoy.

Check out property investment in Costa Rica and you may be glad you did.



ARTHUR

Robert Valentine asked:


A prospectus for a mutual fund describing that fund’s objectives, financial statements, and history probably doesn’t sound like a fun read to most people. But a prospectus is an important document that adds detail and helps potential investors become more informed when making investment decisions.

The added information has made a wealth of knowledge available on many mutual funds. This knowledge can potentially add to the confidence of an investor, should one take the time to get to know their mutual fund.

Even Congress has jumped into the mix. In 2005, Sen. Daniel Akaka from Hawaii proposed the Mutual Fund Transparency Act, which would call for increased disclosure of mutual fund fees, as well as taking a more critical look at mutual fund advertising. While the bill was referred to committee, it signaled an increasingly watchful eye being focused on mutual funds by Washington.

So what are some of the latest areas of mutual fund disclosure to be affected?

1) Holdings: In 2004, the Securities and Exchange Commission (SEC) ruled that mutual fund companies must post their portfolio holdings every quarter through the SEC’s Electronic Data Gathering, Analysis, and Retrieval System, known as EDGAR. This allows mutual fund investors to find out if, and how, the fund is following its stated investment objectives.

2) Fund Manager Compensation and Holdings: Fund managers are required to disclose how they are paid, and by fully knowing how the fund managers’ pay is structured, you can consider if their objectives and plans are similar to your own. Fund managers now must also disclose how much they have invested in the fund, within a certain dollar range.

3) Fees: Also in 2004, the SEC decided that mutual fund companies must disclose the amount of fees they charge per $1000 invested, as well as per $1000 invested assuming a hypothetical 5% gain. The increased transparency allows investors to compare fees to other mutual funds and decide if higher fees translate to performance.

4) Breakpoints: The SEC wants mutual fund companies to do more to inform investors of potential breakpoint discounts on large purchases.

These are just a few of the many disclosures and transparencies that are being encouraged or required by the SEC. The increased regulations are expected to continue in an effort to provide more information to investors.

To know every small detail of a specific mutual fund is a tedious task, but it is one that many financial professionals perform in order to give their clients informed recommendations. While you, as an investor aren’t expected to know everything, it does help to know that the extra information is available and more readily accessible than ever before. In the end, the more knowledge you have of your investment, the more confident you’ll be of your choice.



ERROL

jhcashman asked:


I have a few mutual funds with fidelity which distribute dividends once a year. By default all the dividends are reinvested back into the funds. I would rather have the dividends in cash so I can invest into different funds. Is there any tax benefits to having the dividends reinvested instead of just taking the dividend in cash?

Thanks

CLARK

Randall Berry asked:


If you are still in mutual funds, listen up. Because if you are a reasonable person, you will want to run to the login screen of your online brokerage and look for proof to what I am about to reveal to you. ETFs offer downside risk protection no mutual fund can match.

It is a difference that could cost you thousands in your investment or retirement portfolio.

Okay, maybe you do not HAVE thousands in your investment accounts. If you are just starting to invest your money, pay particular attention my friend. The following page should make your decision between an ETF (exchange traded fund) and a mutual fund clear enough to make an investment decision or take corrective action if necessary.

Here are some basics.

ETFs and mutual funds are similar in that they both hold baskets of securities. A balanced mutual fund can hold bonds, stocks, T-bills and some cash. An ETF is essentially derived from stocks but takes on many forms.

Before I tell you about the potential mistake that could cost you thousands, here are the important differences between ETFs and mutual funds:

* Mutual funds are actively managed by a person who gets paid by people like us usually from the money that WE give him to manage. ETFs are purchased by us and can be bought and sold all day long with few restrictions and almost no minimums.

* Mutual funds charge 2% or more between loading and maintenance, whereas ETFs typically charge between .5 and 1%. Mutual funds usually have no transaction fee. Brokerage commissions must be paid when purchasing an ETF.

* Mutual funds incur capital gains even though no distribution activity (money back to you) takes place. ETFs usually find a way to avoid these taxable events. This is a significant advantage for an ETF and worse, it is not always clear to the investor how and when it happens.

* Mutual funds mitigate risk by sometimes holding cash in anticipation of a down stock market. ETFs are not actively managed, therefore, YOU the investor and purchaser of the ETF must account for this risk when you decide to buy them. Position sizing is one important consideration with an ETF purchase to manage this particular risk.

Here we go now. The biggest mistake you can make in your decision to allocate to mutual funds or ETFs is to overlook one HUGE advantage an ETF holds over the mutual fund:

* STOP-LOSS order: This is a tool you can employ to nail-down a floor beneath which the price of your ETF cannot fall. You arrange this with your broker or click a button if you are investing with an online brokerage. NO SUCH PROTECTION IS AVAILABLE with a mutual fund. And do not expect your fund manager to point this out.

This tactic can stop the bleeding if things really go wrong with the stock market. Better yet, you can set the stop loss and put it on automatic.

This is proactive management of your money, not merely active.

Whether you are just starting your investment portfolio or are a qualified investor you will want to keep yourself informed about the risks and strategies inherent with each class of personal financial investments. It is now possible to acquire a comprehensive library of knowledge on personal finance in audio format if you know where to look.

Carefully consider the point of view of any financial adviser with whom you seek counsel: Is the person carefully considering your future plans for your job or business before advising you?

________________________________________________________________________



CLINT

ratmforever asked:


Hello, as a beginner investor how do you actually earn money from mutual funds? I heard that it’s not about compounding interest and that it’s about the NAV on the day you wish to withdraw the funds that will determine your profit?

I had a perception that it was like time deposit, that your initial investment will earn interest and interest is added up to your initial investment and it will compound over time only that the interest rates varies every time. This is not the case in mutual funds right or is it?

Can someone enlighten me on this? Thanks.
Note: I know what a mutual fund is at least it’s general idea that it’s composed of diversified investments managed by a fund manager. My question is how do you earn technically? Is it like compounding interest or not?

CHADWICK

InvestAgnstGenocide asked:

Fox TV25 does an investigative report on Fidelity mutual funds investing in companies that help to fund the genocide in Darfur. Fidelity is just one of the major mutual fund companies to make such investments.

DON

Shhhhh asked:


I want to put in a stock symbol and get a list of mutual funds that have said stock in thier top holdings. Is there a website that will do that?

Thanks.

ADALBERTO

Cebuguys asked:


All companies I know i.e. Fidelity, Scottrade,
E-trade charge fees…selling/purchase of mutual funds. Which one is the best and least expensive?

GUILLERMO

Marty M asked:


What are some examples of retail mutual funds? Someone said that they are no good and that they rip people off. Please explain. Thanks.

DEANDRE