By : William Smith

Mutual funds are one of the financial world's most popular investment vehicles, and for good reason.

For a relatively small investment, these funds give individual investors the ability to buy a diverse portfolio of stocks and / or other financial instruments - all in one transaction.

If you have just two or more mutual funds, chances are that you're more than adequately diversified. This means that you don't have to worry about one bad apple (i.e. Enron) destroying your entire investment account.

How Mutual Funds Work

So how do these funds work? Each fund is actively managed by a mutual funds professional. This is someone who has several years of experience analyzing and trading stocks or other securities, probably has an advanced degree, and has worked his or her way up the ladder to what is essentially the top of the money management profession.

The fund manager chooses the securities that the mutual fund owns. These funds can be composed of stocks, bonds, and / or other financial instruments.

The types and balance of securities (i.e. 60 percent stocks, 35 percent bonds, 5 percent cash / money market), and the investment objectives and strategies (i.e. aggressive growth or equity income) are listed in the mutual fund's prospectus.

This way investors know what they are getting into each time they buy new mutual funds.

Mutual funds are split into shares, just like stocks. For example, a fund may own 5,000 shares of Microsoft (MSFT); 10,000 shares of General Motors (GM); 20,000 shares of Alcoa (AA), etc., and be split into 100 million shares itself.

If the net asset value (NAV) of the shares is $1 billion, then each share of the fund would be worth $10. The fund manager buys and sells shares of stock that the fund owns - you, in turn, can buy or sell your shares of the fund, but only at the end of each trading day.

No Load Mutual Funds vs. Load Mutual Funds

So what's the catch? Well, mutual fund managers have to be compensated for their services, so they charge you a fee which is sometimes called a "load."

Essentially, you are paying them to have the heartburn and ulcers associated with watching the stock market eight hours a day, 52 weeks a year, so that you don't have to. Whether or not the fund managers earn their keep depends on how skillful they are, and how the fund's fees are structured.

Load mutual funds charge either front-end loads or back-end loads. Front-end loads charge you a percentage of your initial investment.

For example, if you invest $10,000 each into a pair of front-end load funds with loads of 3 percent and 5 percent, you will only be investing $9,700 and $9,500, respectively. How long will it take your funds to make up the $800 you've lost right off the bat?

Instead of charging you up front, back-end load funds don't charge you a load until you withdraw your money.

These funds are usually a better deal, because the size of the loads usually decreases the longer you leave your money in the fund.

For example, a back-end load fund might have a load of 7 percent if you withdraw your money the first year, with the load going down by 1 percentage point each year, and reaching 0 percent by the eighth year.

Mutual Funds - Just Say No To Your Broker; Buy Direct Instead

Typically, full-service brokers with offices on Main Street only sell front-end load funds. This is because they receive an up-front commission on the sale of these products.

Mutual funds are designed for average investors - you don't need a broker to recommend these funds for you, and you don't need to pay the extra sales charges.

There are hundreds of good, no-load funds that charge only a small annual management fee (which load mutual funds charge in addition to their loads) available directly from fund companies.

Most funds have a minimum investment of $2,500, but this can usually be waved if you commit to regular monthly investments of as little as $50.

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By jupita fanklin

Managing the personal finances and to multiply it many fold needs prudent investment strategies. Without gaining adequate knowledge in investment, do not try your hand in various

investment options, which can result in drastic and sometimes disastrous results.

A new investor should first visit the local library and try to get various guides on personal finance. Issues relating to personal finance includes basis for a budget, sticking to the budget, saving money for an easy retirement life, major purchases, and managing the accrued finances properly.

New investors should go through newspapers such as Wall Street Journal, which will familiarize the reader with insurance, stocks, investments etc. through their Friday Column aptly named "Getting Going" by Jonathan Clement.

A new investor should not barge into the stock market based on any half-baked advice by close relatives or friends. For getting a proper idea about overall money management, study books such as The Intelligent Investor. For the sake of reference, this title is highlighted. If you browse in the bookstores or libraries, several other equally good guides might be available.

If excess cash is available immediately and if you are still going through the learning process, without wasting time, you can put the excess money in a mutual fund or even the bank.

Even though this learning process appears to be a daunting chore, it is better than relying on professional money market advisors who will charge a hefty amount for guiding you in making money. Ultimately, you and you alone are responsible for your financial situation - win win or no win.

Once a new investor gets a fair idea about personal finance management, further studies in mutual funds, stocks and bonds will be the next logical step.

A mutual fund is money pooled by a group of investors, which is used to buy stocks or bonds from various companies and strives to achieve a specified target of growth. Many mutual funds set 1000 dollars as the minimum initial investment money. A closed ended mutual fund is similar to a share issued by a company trading in the stock exchanges. It can be traded through a broker just like any other stocks. Open-ended mutual funds assure a fixed annual
income without any surprises.

Some of the popular mutual funds are money-market funds, balanced funds, index funds, pure bond funds, pure stock funds and tax-free bond funds.

The next logical step or the parallel step is investments in stocks.A certain amount of guesswork is needed for buying and selling them. To get some knowledge about the risks involved, try to play the investment games online, which simulates the practice of selling and buying stocks without losing money or facing any risk. After thorough familiarisation, a first trade in stock with
minimum investment can be tried.

Article written by Anastasia Phocas.

Source: http://www.Free-Articles-Zone.com

By sacha tarkovsky

You can enjoy it to. It offers the lot low risk and high returns 30% + per annum and offers a great mutual fund alternative.

Mutual funds offer high risk and low returns after inflation so if you want better returns and low risk then try this one. Its overseas property investment, its cheaper and easier than most people think and the bonus is you not only get an appreciating asset, you can enjoy it to, by having your own home in paradise.

Consider this fact:

A property bought near the popular resort of Jaco in Costa Rica for $30,000 just 15 years ago is worth as much as $750,000 today!

The downside volatility was low, while these huge gains were made.

But it gets better!

This investment not only gives you an appreciating asset, it also gives you a valuable rental income if you want it and the chance to own and visit your own slice of paradise. An a mutual fund alternative it is not expensive and the returns and benefits are stunning.

It’s easy to do

There are plenty of companies to advice you on the best locations. Its tax efficient to and the buying process is easy and for peace of mind you get the same rights as residents?

Will these gains continue?

The answer is yes, because beach front property is up to 70% cheaper in Costa Rica and it’s only a 3 hour direct flight from the southern USA. More Americans and foreign investors are buying than ever before and investment continues to grow making this a trend in motion that will continue for many years.

A simple choice

Let’s face it, mutual funds on the whole consider they do well if they make 12% per annum and with drawdowns up to 30% common and losing periods that last for years it’s not a great investment in terms of risk reward.

Overseas property in Costa Rica is affordable and offers much more and is a great mutual fund alternative you can actually enjoy as well If you want 30% annual gains with low risk and an investment you can enjoy check out this mutual fund alternative and you may be glad you did.

Source: http://www.Free-Articles-Zone.com

By sacha tarkovsky

You can enjoy it to. It offers the lot low risk and high returns 30% + per annum and offers a great mutual fund alternative.

Mutual funds offer high risk and low returns after inflation so if you want better returns and low risk then try this one. Its overseas property investment, its cheaper and easier than most people think and the bonus is you not only get an appreciating asset, you can enjoy it to, by having your own home in paradise.

Consider this fact:

A property bought near the popular resort of Jaco in Costa Rica for $30,000 just 15 years ago is worth as much as $750,000 today!

The downside volatility was low, while these huge gains were made.

But it gets better!

This investment not only gives you an appreciating asset, it also gives you a valuable rental income if you want it and the chance to own and visit your own slice of paradise. An a mutual fund alternative it is not expensive and the returns and benefits are stunning.

It’s easy to do

There are plenty of companies to advice you on the best locations. Its tax efficient to and the buying process is easy and for peace of mind you get the same rights as residents?

Will these gains continue?

The answer is yes, because beach front property is up to 70% cheaper in Costa Rica and it’s only a 3 hour direct flight from the southern USA. More Americans and foreign investors are buying than ever before and investment continues to grow making this a trend in motion that will continue for many years.

A simple choice

Let’s face it, mutual funds on the whole consider they do well if they make 12% per annum and with drawdowns up to 30% common and losing periods that last for years it’s not a great investment in terms of risk reward.

Overseas property in Costa Rica is affordable and offers much more and is a great mutual fund alternative you can actually enjoy as well If you want 30% annual gains with low risk and an investment you can enjoy check out this mutual fund alternative and you may be glad you did.

Source: http://www.Free-Articles-Zone.com

By sacha tarkovsky

Mutual funds as a group perform badly over the longer term.

Most cannot out perform the share index furthermore, a mutual fund is considered good if it reaches double digit gains.

If you take into account the effect of inflation on growth, mutual funds don’t look so attractive and the risk is high, with 30% or more in terms of drawdown and years to recovery in many instances.

So what are the alternatives?

There are plenty of mutual fund alternatives that not only offer higher returns, but lower risk and here we will look at one.

We all know that property is a good solid long term investment and it gets even better if it’s overseas investment property.

Overseas investment property is:

Cheap

Has high growth potential and low risk in many locations

can be very tax efficient

The country we will look at here is Costa Rica.

An example of the high growth potential can be made is illustrated by the following example.

A property purchased for just $30,000 near the popular holiday resort of Jaco 15 years ago, is worth $800,000 today.

The above gets even better when you consider these gains were steady and drawdowns were small and short lived.

But it gets better.

Overseas investment property can not only yield capital gains, it can also provide valuable extra rental income and act as a free holiday home – so you get to enjoy it to!

Will Costa Rica continue to provide great investment returns?

The answer is yes.

As more Americans want beach front property at affordable prices and in Costa Rica properties can cost up to 70% less than in the USA and Costa Rica is only a 2 hour flight away.

There are many expanding resorts where property can be bought cheaply with solid long term capital growth potential.

The buying process is easy.

Costa Rica encourages foreign investment and overseas buyers get the same rights as residents.

Investing in overseas property is also much easier than many people think.

You don’t need any specialist knowledge and there are many Realtors who specialize in helping foreign buyers acquire the right property in terms of:

Their budget and their expectations in terms of growth.

Many investors simply hope their mutual funds will deliver above average capital gains, but the odds are against them, despite what the sales literature says.

Of course, the risk is also high when investing in mutual funds and losing periods can and do, last years.

Costa Rica offers a great alternative to mutual funds and offers high returns, coupled with low risk.

If you are looking for solid longer term gains then an overseas property investment in a country such as Costa Rica is ideal.

Add in the potential for good rental income and a free holiday home and you have an investment you can actually enjoy as well, in one of the most beautiful countries on earth.

Consider the facts

Add all the above up and you have an investment that is well worth considering, from both a financial and a lifestyle point of view.

Over 100,000 Americans and other foreign investors have bought property in Costa Rica and maybe you should consider it to.

Source: http://www.Free-Articles-Zone.com