WHAT ARE MUTUAL FUNDS ? HOW CAN ONE INVEST IN IT AND GAIN PROFIT?

details of mutual fund, heading companies in this sector

{ 4 comments }

Vic January 31, 2011 at 11:15 pm

Mutual funds are pools of money managed by an investment company. They raise money by selling shares of the fund to investors. That money is used to purchase stocks, bonds and money market instruments of various companies. In return, shareholders receive an equity position in the fund and, in effect, in each of its underlying securities. Mutual funds give the average person the ability to invest in companies only wealthy investors could otherwise afford. They offer diversification, professional money management, liquidity, and convenience, but charge fees and many require a minimum investment. There are many types of mutual funds, and you should get the assistance of an adviser, or do some research yourself before jumping in. There is much more to it, too much to write. Morningstar is a company that rates mutual funds, and Bloomberg.com is great for market information.

Joseph P January 31, 2011 at 11:54 pm

Mutual Funds are run by investment banks. What these banks do is create a portfolio of stocks that they feel will accomplish a certain goal. Certain mutual funds have different goals (ie: growth, income). Once the bank has its portfolio set up, it then determines how much it would cost to buy a share of their portfolio. This is what you would pay. As the stocks fluctuate the price of the mutual fund will also fluctuate, usually only by a few cents.

A mutual fund offers a safe investment USUALLY, not always. Certain mutual funds focus on specific areas of the market such as the oil technologies sector etc. IF this is the case then that is a volatile mutual fund because if the sector crashes so does the fund.

Do some research, Fidelity offers several quality mutual funds. I own some shares of Fidelity growth and income which pays a small dividend while also showing some price growth. (FGRIX)

This mutual fund has approx 50-60 stocks in its portfolio, so even when one stock has a bad day the others can balance the loss.

Another fund suggestion from Fidelity that I reccommend is the Fidelity 50 (FFTYX)

This fund offers a higher yield and greater growth potential, however this fund has fewer stocks in its portfolio, approx 25-30.

Good luck with the investing if you would like more advice you can e-mail me at Joseph_poma@yahoo.com

By The Way…

I am a high school math teacher, I have a diversified portfolio of both stocks and mutual funds. I have been an active research and investor for the past 3 years with an approximate 150% return on all of my past and current investments. I also feel that it is important to note that I do Not work for a bank and or investment company. I in no way profit from anything that I am saying…just giving some advice to help everyone invest and maybe live an easier life :) Peace and God Bless.
~Joe

jemmy t February 1, 2011 at 12:15 am

For people wanting to invest, but don’t know where to invest, they can consider investments in mutual funds. These funds offer a varied investment opportunity for the shareholders who have bought the fund’s shares. They are an effective method of building a varied investment portfolio, or they can augment your existing portfolio with securities chosen by the mutual fund manager. Refer to this guide about detailed explanation of the mutual funds.

Definition of Mutual Funds: You should know the meaning of mutual funds, before you choose to invest in mutual funds. These funds are a type of security that can be traded on the stock market, allowing shareholders to buy and sell shares in the funds. The revenue generated by purchase of shares is used by mutual fund manager to buy more shares of specific stocks, bonds, and other market securities and money market instruments.

Dipendra N February 1, 2011 at 1:05 am

if all members of your family contribute Rs 100 for a picnic, the funds thus collected is mutual fund for picnic. When you put money in any mutual fund, you are actually putting money with thousands of people in a fund called mutual fund. So the mutual fund company which has opened a mutual fund receives all the money . This company now have huge cash reserves which it puts/invest into capital market through shares and bonds and is managed by a fund manager. The profit or loss that the entire fund makes is shared proportionally. The mutual fund companies make money in the form of fees charged which is actually very less compared to the returns .

In india the people have started understanding the benefits of informed investing i.e mutual fund investing. i will suggest you few address of places where you should go to check more on mutual fund investing as mutual funds are the core of financial planning. In india the top info on mf is provided by a rather net website dedicating to the aspect of mutual fund investment.the addresses are -
All the answer to your questions are these pages shown under:

http://www.godmind.co.in/mutual_fond_for_u/benefits_mf_invest.htm

http://www.godmind.co.in/mutual_fond_for_u/how_u_earn_frm_mf.htm

http://www.godmind.co.in/mutual_fond_for_u/indian_mf_indus.htm

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