3 Tips to Choose the Fund Manager

It is undeniable that saving is needed as a guarantee of a person's life. However, there are still many people who do not realize the importance of this. Some surveys say that many people, usually women, do not have enough retirement plans.

Financial independence and readiness towards retirement are two things that must be prepared early be each person. One way to prepare for retirement is by investing through mutual funds. The fund is managed by the Fund Manager through the investment portfolio, whether it is stocks, bonds, money markets, and others.

You cannot just pick securities (investment management agency). For that, there are some things to consider when choosing a fund manager to manage your investment in mutual funds.

1. Reputation
When selecting investments in mutual funds, you should select a reliable securities and having good reputation. It is better to choose fund manager that have a good world reputation. World reputation of a company can become a guarantee of competence.
In addition, this reputation will also be influential in determining the manager's experience in handling clients. This experience will influence whether they can survive the crisis and the recession or not.

2. Turn over
When deciding to invest in mutual funds, there is nothing wrong to look at who will be the fund manager of your assets. If your manager frequently changing due to various reasons (new job, etc.), it can be considered to choose other company. This can be done by monitoring the development of the fund manager for some time. If a change of manager too often, it would disrupt the consistency of policy and investment.

3. Study growth
The development and the potential of managers are also worth a consideration. Manager’s capabilities in managing mutual funds will help you get the most benefit and appropriate financial arrangements. At least select the fund manager with steady study growth and do not be too volatile-ups and downs.

[image taken from: livetradingnews.com]

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Stock mutual funds in foreign currency

You would often hear the proverb 'high risk high return' in the investment world. Among the types of mutual funds, stock mutual fund is an investment tool that refers to that proverb. Potential costs and benefits derived from the rising and falling of stock prices. If the stock price tends to increase, the net asset value (NAV) goes up, vice versa.

For long-term

Mutual fund investment is the best used as a long term investment. With a longer time to manage investments, normally the investment manager can provide a positive return to the maximum.

For the stock mutual fund denominated in foreign currency, there are two potential advantages: the increase price of underlying asset and the strengthening of the exchange rate. Therefore, this type mutual fund can also be a means of foreign exchange hedging against exchange rate fluctuations.

Conversely, the risk is also double, i.e. when the underlying asset price falls and the exchange rate weakened. Clearly, foreign currency mutual funds can be used to meet foreign exchange needs in the future.

However, investors should not be hasty to choose the mutual fund products. The exchange rates are always changing. Investment manager's profile is more important as a consideration in choosing a product. From this it can be seen the performance of historical returns (products) that they manage.

Investment allocation that managed by the investment manager must also be the concern of investors. Check whether the Investment Manager invest in liquid stocks or not. Sometimes the investment manager also allocates investment in overseas stock markets.

Who is interested?

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Mutual Funds or Unit Linked?

In personal financial planning, a man's income should be allocated on three main points, namely consumption, savings, and investment plus protection.

Consumption allocation is used to finance the consumption needs of food, clothing, and house. Saving has its function just-in-case, and investment is to cultivate owned assets. And lastly, everyone is usually fortifying the risk with insurance.

The problem is, investment and insurance products continue to grow, in line with the wishes of the users of the product. Including the product mixed of various types of investments and insurance. For example, various types of mutual funds; insurance plus savings; insurance plus investment, and the combination of unit-linked products can be assumed that such interbreeding.

Mutual fund is basically a wide range of financial investment products, such as stocks, bonds, money market securities, etc. There are equities, fixed income mutual funds, mixed funds, as well as money market funds.

While unit-linked identified as life insurance product that is combined with investment. Thus, when it is the time to pay the insurance premium, some portion of the premium is invested into various securities, known as units. Management of investment funds is done separately by fund managers.

The difference is in mutual funds, all customers' funds have been invested in the product since its inception. In other words, the funds placed at once when buying mutual funds.

In unit-linked product, insurance premiums that have been paid in stages are invested. In short, the mutual funds, investments are made at the same time, the unit-linked investments are made in stages.

Investment objectives will answer which one is better because it fits with the needs. If the customer already has a standalone protection, investing directly in mutual funds can be an alternative if there is still fund available. If you want to have protection plus investment together, and don't have much enough fund available, unit linked can be an option.

But the selection of the two options above should be appropriate to your needs and abilities. Basically, the management of mutual funds and unit linked, in the aspects of the investment, is managed by fund managers. So the success of investments in both of these products relies on the expertise of fund managers in selecting investment products.

So consider carefully beforehand the institution issuing of mutual fund products as well as unit-linked. After that, examine carefully the type of investment product to be purchased. In order we will not to regret in the future.

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Advantages and disadvantages of mutual funds

Investing in mutual funds can provide attractive benefits to your personal financial planning as an investor. But that does not mean that mutual funds have always been profitable because there are losses to be borne if you invest in this kind of investment instruments.

Advantages of Mutual Funds

Professional Management - The main advantage of buying mutual funds is to have a management team that can manage your money professionally. Investors generally do not have enough time and expertise to manage their own portfolio.

Diversification - Buying mutual funds, compared to buying stocks and bonds separately, the risk will be more diversified. A mutual fund generally invests into hundreds of different stocks in various industry sectors. It is certainly difficult to do with "small" funds.

Economies of Scale - Mutual funds do buy and sell securities in large quantities in a time so that the transaction costs that occur will relatively lower compared to transaction costs by individual investors.

Liquidity - As with stocks, mutual funds can be converted into cash quickly and easily.

Simplicity - Buying a mutual fund is relatively easy and inexpensive, where many commercial banks provide services to buying and selling mutual funds that are integrated with other bank's services.

Disadvantages of Mutual Funds

Professional Management - It could be a disadvantage because the professionals are not necessarily better than you personally. Investment management can do mistakes, and they still get paid even make you lose.

Cost - Create, distribute, and manage the mutual funds require a lot of cost. All, ranging from the investment manager's salary up to the investor reports require a fee. These costs are charged to investors, although it varies between one another. But the failure to identify the cost could give negative consequences in the long run.

Dilution - Too much diversification will make the investment manager harder to do analysis. High returns of several investment instruments will not provide significant impact on total return. The greater the mutual funds it will be difficult to allocate funds for a good investment.

Taxes - When a fund manager sells securities, the tax would arise. Mutual fund investment began to feel some quite stifling taxes for subsequent years.

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Stocks or Mutual Funds?

If you happen to have some money left over at the end of all bill payments, or even if you are beginning a prudent and fiscally responsible bid for the wealth that incorporates some investment opportunities, you may be wondering whether the investment in buying stocks or mutual funds offered the best returns.

To help you make the decision, it is important to understand that stocks and mutual funds are.

Stocks: Most people think they have a basic understanding of what stocks are simply due to their exposure at the end of every day use. Stocks are individual bits of the companies that are available for purchase by the public in opening trading on the stock market. People are often sold in bunches, and therefore to buy a stock in a company often involves some kind of minimum purchase. Shareholders have a vested interest in the company's welfare as the price of its shares is directly related to the performance of a company. The stocks are divided by type of business they represent, which is known as a sector.

Mutual Funds: Mutual funds are collective investment pools a lot of money from investors and put the money in stocks, bonds and other investments. Mutual funds are usually managed by a certified professional, as opposed to managing individual stocks. In essence, the funds use to incorporate different types of stocks.

The question of whether or not to invest in stocks or mutual funds that primarily comes down to personal experience and wealth of the individual. Many people will be tempted by the 'game' of the stock and the unique opportunity to invest in a company that is known or can be easily investigated. The fact is, however, investment in each stock is a risky maneuver in the whole process hangs in the welfare of a single company. Even wealthy investors diversify their portfolios by investing in different types of stocks.

The best for the beginning investor is to buy mutual funds. Mutual funds will share the cost from different populations, reducing the risk of losing your money and increased potential earning. Mutual funds cannot provide enough excitement to invest in a sort of balance, but good long-term investment opportunities. In addition, mutual funds are managed by professionals who are familiar with the challenges and opportunities of investment in the sector, to reduce both the risk and the time it would take to collect each population through research and appointments. Mutual funds also distribute risk among many investors, and managed by someone who probably has contacts in the financial world.

For the person with some extra money, you do not have the time or experience to 'play' the stock market , mutual funds will be the best option for your personal financial planning.

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Money Market Funds - the advantages

You must have heard about an investment instrument that is called Mutual Funds. Basically, a mutual fund is a vehicle used to collect funds from public investors to be invested in portfolio securities by investment managers. Mutual funds consist of various kinds, among of them is money market funds. So, what is money market fund?

To be sure, do not equate this type of mutual funds to conventional mutual funds. Money market funds do have some differences with the conventional mutual funds. This kind of mutual fund does not mean a mutual fund that place assets in various currencies fundamentalist or a variety of foreign exchange business. In contrast, money market funds are a mutual fund that puts all of the assets of investors in money market instruments. Then, what is called money market instruments? Money market instruments are securities with maturities of less than a year, for example, bank certificates, deposits, or bonds with maturities of less than one year.

With maturities of less than one year, automatically this money market fund is more liquid than regular mutual fund. This type is very suitable for novice investors, who are still attached to investing in deposits, but want to try investing in mutual funds. Although this fund has an interest that is not much different from the deposit, this type of mutual fund still has more advantages.

First, the withdrawal time is very flexible. As I mentioned above, this type of mutual funds have high liquidity. This is very different from the deposit; investors can liquidate their funds only if it is due. If investors want to withdraw their money in bank deposit product before its maturity, investors will be subject to a penalty. The amount could reach more than 10% of interest.

Second, investors can determine the amount of money want disbursed. Meanwhile, on deposit, investors cannot determine its own amount of money to withdraw. Inevitably, investors must be willing to withdraw all his money on deposit plus the entire yield.

The other advantage of money market funds is the profit. The profit that is higher than bank deposits. This is because this type of mutual fund usually put most of funds in the short-term bonds. Well, this kind of bonds, in addition to having higher interest than deposits, the mutual fund also has capital gains from the secondary market, although not so significant.

After describing some of the advantages of money market funds, there is no harm if you are just beginning to switch profile-from bank deposit investor to mutual fund investor- try this type. But I suggest, if indeed you already have an adequate understanding of world capital markets, invest your funds in instruments that have higher capital gains even though the risk is also definitely will be higher (remember, High Profit, High Risk). To be sure, for a better personal financial planning, avoid investment in uniform, prioritizing your funds diversified into several different instruments.

Happy investing :)

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4 Best Advantages of Mutual Funds Investment

Mutual funds have grown in popularity over the past few years to the point that it is more difficult to find an investor who is not using mutual funds as one of his investment. The popularity of mutual funds is not surprising if one considers that they are one of the easiest investments to use and require very little knowledge of financial markets. There are 4 main advantages of mutual funds for each investor, you will learn in this article.

1. The first advantage is that mutual funds are offered by a professional fund management. Your investment funds are managed by fund managers, which are essentially to ensure your investment per day. Almost no other place where you get such huge investment management without having to pay management fees.

2. The second advantage of mutual funds is that mutual funds are very liquid. Any investor can sell its shares in a mutual fund any day the bag is open. Compared with investing in real estate, or even people who have a low volume of transactions that take weeks to months to liquidate his stake. The liquidity of any investment fund gives you the ability to quickly exit the investment if necessary.

3. The third advantage of mutual funds is the diversification. Mutual funds invest in dozens or even hundreds of stocks, bonds or money markets. Trying to replicate this type of diversification in your portfolio would result in very high rates of trade, not to mention big headaches mobilization to monitor hundreds of stocks. This brings us in the fourth advantage of mutual funds, the reduction of fees.

4. Mutual funds have very low rates, due to its ability to exploit economies of scale. Since mutual funds are investing in the pooling of many investors’ fund and can buy leading stock in large quantities to lower rates of investor funds. Many mutual funds that have lower rates of 2 or 3%.

Mutual funds are growing at a feverish pace as more and more investors put their money on them. You also required to put mutual funds in your personal financial planning portfolio.

Happy investing :)

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Reasons to Put Your Money in Mutual Funds

Investing in the stock market can be very lucrative and risky. If you know what you're doing, or you are very lucky, you can make a lot of money. The historical average return is around 13% or maybe more, which is higher than many other available investments such as bonds. Further, a mutual funds investment created. Basically, a mutual fund consist of collection of stocks and/or bonds. If a mutual fund composed of stocks, why not buy stocks?

First, not all the invested funds in mutual fund are composed to entirely of stocks. The investment manager, who manages the funds, will invest them in bonds, real estate, currencies, commodities and other investments. That alone is a great reason to invest in mutual funds instead of stocks. We could have investment diversification. If you invest $ 1000, with mutual funds, your money is pooled with others so you can get a small portion of hundreds of investments that will greatly reduce the risk of your investments.

This brings us to our next point, affordability. Most of us probably cannot afford the $ 20,000 investment required to have a well diversified portfolio. With a mutual fund, you do not have to worry about diversification, as already done by the fund manager for you. Moreover, investing in stocks can have a lot of costly fees. If you choose mutual funds, you do not have to pay fees. Even there is a fee, it will be small amount. You do not have to worry about trading fees that can be very abrupt in the buying and selling stocks.

Finally, mutual funds are easy investment. When we invest in stocks, we have to do some kind of stocks research, such as reading financial statements, hot news, reviewing history , and understanding of what you are doing. This takes much time and effort that can only happen if you pay a financial adviser or broker enough money to do this for you. With mutual funds, we can invest without professional fees and stock picks. Now I understand that no one can successfully predict the stock market 100% every time, but a financial professional, at least you can do better, possibly, what you choose.

If you finally realized the need to invest your money and you do not know how to invest or what to invest, start with mutual funds. See your money grow. And if you ever feel confident enough that you can buy your own stock picks. Until then, do not waste precious time, start investing immediately!

Happy investing :)

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How to Avoid Bad Mutual Funds?

We've all heard of the benefits of mutual fund investment. First, mutual funds hire professional analysts that are market experts and devout many hours of study in different populations. So you don’t need to study the market intensively on your own. Then there is well documented of diversification. Risk is reduced by holding several non correlated investments. In short, some rise, fall and some combination, the return of the fluctuations of the levels, or risk.

Finally, a mutual fund is offering investors an opportunity to invest in small increments rather than you having to save a lot of cash to buy 100 shares of stock. Given the above advantages, there is extra wonder that mutual funds have become a very popular form of investment.

Now there are thousands of mutual funds to choose from, so how can one make a selection? Here are some tips:

1. Not jump on the merits of recently best performing. It may seem that the safe and rational thing to do, but like many people, you want to buy low and sell high, buy high and no more pray for growth.

2. Even good funds may not be able to overcome the force of the global market. You should be looking for funds may exceed the broad market without increasing risk. Each fund has certain risk parameters that need to follow. Read the prospectus to understand what they are.

3. Limit the number of funds you own. Unless they are just trying to get the same performance as the broad market diversification, many mutual funds do not reduce risk or increase performance by much.

4. Funds that become too popular and too big tend to fall in performance. There are several reasons for this.

One final point to note is that the type of funds is totally dependent on your investment objectives. There are some funds that are intended to gather retirement goals, income, growth, funding for the university to the kids, etc.

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5 Tips of Selecting Mutual Funds

Mutual funds offer the most convenient way to invest in the capital, debt and money markets. The increased participation is testament to the fact that there is a general awareness of it. It is also recommended to put a mutual fund on your personal financial planning. Recent years, the industry of investment funds has grown many, not only in terms of size but also in terms of tenders.

While one hand is good, the increase in the number of deals has also led to a state of dilemma in the minds of investors. They are often confused when it comes to selecting the right of the large amount of funds available. Worse, many investors think that "any" investment fund can help you reach your desired goals.

The fact is that not all funds are the same. There are several aspects within a fund that an investor should carefully consider before short-listing for the investments.

The fund's past performance is important in the analysis of a mutual fund. However, remember that just because a fund has performed well in the past does not mean you have a good performance in the future. If a mutual fund has a well established history, the probability for a good performance in the future is higher than those have not worked well.

The following factors should be considered in evaluating the performance of a fund, and could guide you in selecting mutual funds:

1) Comparisons
The performance of a fund on its own says nothing. Therefore, it becomes crucial to compare the fund with its benchmark and peers, in order to derive a meaningful conclusion. Again, be careful when selecting pairs for comparison. “Do not compare apples with oranges "

2) Period of time
It is pertinent for investors to have a long term (at least 3-5 years) horizon of financial planning, if you want to invest in venture capital funds targeted. Therefore, it is important for us to assess the long-term performance of funds. This does not imply that the short-term performance is ignored. Short-term performance should be assessed, however, attention should focus more on long-term performance. It is equally important to assess how a fund has performed over different market cycles (especially during the recession).

3) Returns
Returns are obviously one of the important parameters that one should look at while evaluating a fund. But remember, if it is one of the most important, is not the only parameter. Many investors simply invest in a mutual fund, given that it has increased profitability.

4) Risk
Risk is usually measured by the standard deviation. From the perspective of an investor, a fund assessment of risk parameters is important because it will help to check whether the fund's risk profile fits your risk profile or not. For example, if two funds have issued similar statements, then a prudent investor would invest in the fund that has less risk.

5) Concentration of the portfolio
Funds that have a high concentration in certain stocks or sectors tend to be very risky and volatile. Therefore, investors should invest in these funds only if they have a high risk appetite. Ideally, a well-diversified fund must maintain no more than 40% of its assets in its top 10 stock holdings.

Make sure not to put all your eggs in one basket. Happy investing :)

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6 Basic Guide of Mutual Funds Investment

In general, the mutual fund is a way of investment in which people who have a small amount of money can potentially invest to have higher return prices and values from bond or stocks. Which otherwise, would be available only in large lots that you cannot afford on your own. The way this happens is through sharing the money to many people to buy large chunks of stock at lower prices. A mutual fund is an investment alternative consisting of the contributions made by individuals and businesses. These contributions constitute what is defined as the fund's assets.

Investing in mutual funds is a very good investment, especially for a long term investment. And also for those who don’t have enough budget for trading directly in stocks market. Thus, before deciding to buy a mutual fund, there are things you should know first.

Following are 6 Basic Guide of Mutual Funds Investment:

1. Choosing the best fund.

To make a good decision when investing your money, you should analyze the following variables:
- Objective: I want to buy or spend the resources to be obtained from this investment.
- U-term horizon: as a client you have to identify whether an investment is short, medium or long term. In this way, you can select the type of substance in terms of time that can adjust to your needs.

2. Check out the types of funds.

- Equity Funds: If you want a long term investment with high returns over time, and not afraid to risk, consider a this type of fund.

- Fixed income: It is designed to obtain returns, but generally lower than those that equity funds could deliver. It is also recommended for people who want a stable gain over time, although this is not assured.

- The short-term mutual funds: Generally compete with the classic deposits. The decision to choose one or the other depends on whether you want absolute safety, but tied to a fixed term (in which case you should deposit), or a gain would rather not completely assured, but without being tied to a fixed term.

3. Do not invest in a fund based on its historical performance.

The good performance of a fund may be the temporary result of specific circumstances that are not necessarily repeated in the future. Past performance provides important information in regard to how risky a fund is and whether it has behaved in a similar way to the market and no comparable funding for future performance. Therefore, it is not advisable to invest in the fund's most profitable year, guided only by this factor.

4. Check your subscriber agreement

When investing, you have to sign a subscription contract fees and the management company must report the fund's rules. Rules may contain at least the following information:
- Compensation charged by the society for the administration of the fund.
- Fees charged on investment.
- Deadline for payment of ransom (how long it returns the money has been invested in the background.)
- Investment Policy of resources.
- Investment plans.

5. How are your mutual funds managed?

Fund managers, portfolio managers, are based on many economic studies of sectors and companies and their experience in the market. They also analyze trends in prices, interest rates, the exchange rate (dollar). They are advised by research teams comprised of analysts specializing in different asset classes and sectors.

6. Calculates the moment of rescue

At this point, you know whether you won or you lost your investment. For this, compare the value share of the day you started your investment to the value at the date of redemption. If the difference at the day of the rescue is positive, you have won, if negative, you lose. It's that simple.

It is a fact that there are many advantages and disadvantages of mutual funds. Hopefully the above basic guide of mutual funds investment will help you minimize your losses and maximize profits in mutual funds. For your best personal financial planning, it is good to have the advice of experts in this field and do research on your own about the laws, rules, obligations and business conditions. This will help you identify the best decision, which you can invest your hard earned money, while acquiring practical knowledge about how to invest in mutual funds.

Happy investing :)

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What is Mutual Fund? How they work?

In this post we'll discuss about what is mutual fund. Mutual fund is one of investment product. Maybe you often to hear the success stories of people who playing stocks. You want to be like that, but you are also afraid of the risk of losses that might occur if we invest in the stock market. Besides, you do not have time, knowledge, or stock exchange experience to trade. Because of your daily work as an employee at a company for example. Probably it will dampen your enthusiasm to 'play' in stocks. In fact, the investment yield offered quite a lot. So, what can we do?

Mutual fund is the answer. When investing in mutual fund, you could do 'stock investment' with more affordable capital. You do not need to bother watching the movement of stock in real time or do an evaluation on a regular basis. Because it's all done by the investment manager/company. Thus, what exactly mutual fund is?

The Mutual Funds are nothing more and nothing less than a set of financial instruments managed by a stockbroker or investment manager/company. These can be composed of stocks, bonds, term deposits and even other mutual funds. These financial instruments may be domestic or foreign. With all these elements there are many possible types of funds: national funds deposits, equity funds, mixed funds with stocks and bonds, foreign stock funds anywhere in the world or even mixed in different regions of the world.

Philosophically, mutual fund is an instrument for collecting funds from the public which are collectively used to be invested in investment instruments that are relatively difficult to access by ordinary people, such as stocks or bonds and even deposits. The funds are collected and screened by an investment company commonly known as the Investment Manager

When you invest in a mutual fund, you buy a certain number of shares of the fund. The shares have a value (share value), which changes daily and reflects the returns obtained. The stock broker company or investment manager will invest in some stocks from various company. Then they will divide the total investment into fragments or share unit. Let's say $1,000,000 and each share unit is $1,000. So total share unit would be $1,000,000 / $1,000 = 1000 units. This units will offered to people who wish to invest

For example, you can invest $ 1,000 in a fund share value. While at that day the share value was $ 100. Therefore, with $ 1,000, you purchased 10 shares. Suppose that after a few months the value has 10% increase. So it would be from $ 100 to $ 110. Thus, now your 10 shares worth $110 each, and the total money will have risen from $ 1,000 to $ 1,100. You already have $100 margin whether you wish to sell it out.

It's just a very simple example and simplified. But that is about the working system of mutual fund. How is it? Is it interested you or not? You can invest without having to bother to monitor its development. Mutual fund is highly suggested for those who don't have enough money of their budget for directly invest in stock floor. Or for those who afraid of risks of stock investing. Many people put this mutual fund in their personal financial planning. Especially the employees, who do not have much time for daily monitoring of stock price, etc.

Happy investing :)

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