Research Mutual Funds Before You Invest
This type of question normally requires a time frame such as ytd, 1, year, 3 year, 5 year, etc. Seldom if ever will one fund be best over all periods of time.
1 yr return DSPML Technology.com 34.6%
3 yr return tie Magnum Taxgain 61.6%
Magnum Global
5 yr return Reliance Growth 59.3%
http://www.valueresearchonline.com/funds/default.asp
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How can I tell if my mutual funds are performing satisfactorily?
In Sept. 2006 I opened the following 2 mutual funds, thru a broker, with a $500 investment in each, and have been auto-depositing $50 per month every month since then.
When I look at my mutual fund statement online at www.americanfunds.com, then logging into my account (by looking at the income dividends and captial gains that have posted to my account) it looks as though it is only making about 3 % Should I contact my broker and ask questions? Or is there a website to help me interpret the mutual fund info?
(1) Ticker: CIBCX American Funds Capital Inc. Bldr. C (312)
(2) Ticker: IFACX American Funds Inc. Fund of America -C (306)
They look ok, but not the best. You can to to morningstar.com to see how they rank vs. other funds.
To be honest though, mutual funds are appropriate for some and the wrong investment for a increasingly growing number of people.
For me, I would NOT invest in mutual funds if it weren't for having a 401K.
Overall, Mutual funds are not good (once you're educated in investing) and many people should not invest in mutual funds unless you have to (like if it were a requirement in a 401K).
Here's why.
First of all, mutual funds exist to take average person's money.
Second, mutual funds seem to be "happy" just to do better than the S&P index, since that's often the gauge. A monkey, yes monkey, can usually outpick most mutual funds. Over 60% of the mutual funds out there can't even outperform the market (CNBC just reported the current # was 72%). That's VERY SAD!
Third, mutual funds have embedded management fees in their costs. Most of these mgmt fees are 0.5% to 2% annually. This is one of the reasons they can’t outperform the market; they take a cut out regardless of how well or poorly they do!
Fourth, most mutual funds exist not to earn you a lot of money, but are more interested in NOT "losing" you lots of money. That way you stay with them and they continue to collect their fees. Did they not highlight to you that they take this fee each and every year regardless of how poorly they do?
Fifth, mutual funds are not as liquid as one might think. If you're in mutual funds and a Bush talks in the morning and you call your broker to sell because the market is now tanking, the broker will gladly take your order, but the order will not be executed until the day is over and the negative impact is already priced into the fund.
Sixth, many mutual funds charge extra "fees" if you buy/sell their fund within a certain amount of time, meaning you must keep your money in the fund 90 days to 2 yrs before you're free from the fees (read the fine print on trying to get a withdrawal). These fees can be up to 3% or so of your money as well.
Seventh, mutual funds have to be in the market. So if the market is crashing or going down like it has between May and now, then the funds still have to be in the market and taking those losses too. With some practice, you can time your monies to avoid some of those losses (it'll take practice).
Convinced yet? Need more?
Eighth, mutual funds have to be pretty diversified and so if there are hot and cold sectors, they are probably in both the hot sectors and cold sectors. However, as an investor, you can buy into just the sectors you want, like metals, or housing, or energy, etc. or right now, Brokers/Dealers, Retail, and insurance!
Ninth, mutual funds are so big, they can only invest in certain companies. A small mutual fund with $10 billion in assets. 1% of that money is $100 million. How many companies are this big where $100 million investment isn't the whole company? Do you want to limit yourself to just those larger companies like Times Warner, Microsoft, home depot, Cisco, Ebay which have been sideways for years? I think not.
A better way would be to buy ETFs (exchange traded funds) or holders. These trade like stocks, so are very liquid, and do not have the high fees like the mutual funds. Further, you can buy/sell them as you wish. They represent sectors or indexes, so buying them gives you the same diversification as the sector/industry/index, but with much less overhead!
See Amex.com (american stock exchange) or ishares.com, holders.com for more info.
You need to invest for yourself. If you can't, then sure, use mutual funds. But be aware of the shortcomings (and as you can see, there are many).
Let me know if you have further questions.
Best of luck!
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The AIM China I fund is up 51.64% Year-to-date (as of 8/24/07).
Of course, chasing return is the road to financial ruin.
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If you are one of the many investors saving for retirement and wondering how you will maintain your standard of living as your investments are not performing and the Sate looks to provide less and less this article is for you.
Quite simply, most of the baby boomer generation (that’s about 70 million) people face a retirement where they wont maintain the standard of living their used to.
They need high growth and low risk but what are the best investments?
Getting low risk and high rewards
Saving for retirement means getting low risk and high reward but mutual funds and equity managers generally perform poorly and double digit gains are considered good but with inflation eating in. that’s not much!
Its time to look at other ways to save for retirement and there is one method that is becoming more attractive to Americans and other foreigners than ever.
Its investing in Costa Rican land and property.
If you have never considered this as part of your savings for retirement plan then you should consider this
1. Costa Rican land & property prices are booming
Over the last 5 years prime property prices are up by as much as 300% and year on year since 1997 when the boom began and downside has been almost non existent.
Does this sound a better return than your mutual fund with less risk?
2.The boom will continue
It is exactly the problems in the US with regard to getting better performance that will drive these prices higher.
Many Americans are not only thinking of buying land and property for investment purposes but they are moving to Costa Rica in ever increasing numbers
Why? Because they can get property at 70% cheaper, living costs are 70% cheaper and they can live in a stable country with all the comforts of home just 3 hours from the US!
3. Investing the easy way
The government makes buying land and property easy, you get the same rights as residents and its very tax efficient.
4. Risk / reward
Saving for retirement is all about risk / reward.
You want the high growth rates without huge downside swings, Costa Rican property and land investments provide you with this.
Keep in mind
If you buy a property as an investment you don’t have to wait to sell it to make money -rent it out in the booming rental market.
As more and more people move to Costa Rica from the US and more big companies such as Intel and proctor and Gamble re locate parts of their operation, the rental market will continue to be buoyant.
Finally, you may end up doing what many Americans already have..
Simply, don’t sell your investment property move to Costa Rica and live in it.
Many investors started saving for retirement by buying a second property in Costa Rica, then when they saw the standard of living they moved! Consider this:
You can live on $2,000 a month, there is no tax on social security checks, the country is safe, stable, has good infrastructure, all the comforts of home, a large American population (so you feel at home) and all this is just a 3 hour direct flight from the US.
Of course, when saving for retirement wouldn’t it be nice to own or live in a paradise? With everything from pristine beaches to rainforest and one of the best climates on earth Costa Rica has this and much more.
If you have never considered Costa Rica in your saving for retirement plans or re-locating, then you should it makes perfect sense.
