Types of Investments
Key Benefits Of Investing In Mutual Funds
By [http://ezinearticles.com/?expert=Anthony_Bertucci]Anthony Bertucci
All types of investments come with some sort of risk and normally has its ups and downs. The same can be said for mutual fund investments although the level of risk is much lower then investing in directly into stocks since a mutual fund is a collective investment that uses money from the investor to purchase a group of stocks/investments as the value of those investments increase and decrease so to does the value of the fund. There are both pros and cons with mutual fund investing but for today we are just going to focus on the benefits listed below.
Typically the most reassuring part of investing in a mutual fund is the knowledge that your fund is being managed and taken care of by a professional. When you buy and sell stocks and bonds, your best weapon beside due diligence is your gut instinct and a dogeared copy of the Wall Street Journal. With mutual funds, you're trusting your investment to an expert or experts people whom probably have the Journal memorized and also has an entire corporation's brain trust at their disposal. Its always a good idea to look into the mutual fund your thinking of buying previous history, success and do at least a quick Google search try to see what others maybe saying about the fund in question.
For investors working on a tight budget that do not have much wiggle room, mutual funds are a great choice because they have maximum liquidity. Liquidity refers to how easy it is to get your cash back should you ever need it or simply want out of the investment. With some investments (especially low risk investments), your money can be tied up for extended periods of time with no way for you to access it without huge penalties or complete forfeit of any profits earned so far. You can hold onto a fund as long or you wish or you can sell at the end of every trading day so you can have instant almost instant access to your investment money anytime.
A popular phrase associated with investing and used by many investors is diversification. Being a diverse investor means you don't want all of your investments in the same thing. Since a fund will invest in stocks, commodities, bonds and other things, you can start to diversity your current investment portfolio instantly by investing in mutual funds.
Another attractive benefit for those that are new to investing is how easy mutual fund investing is. Most investors don't even have to worry about paying the proper tax and keeping the right records because the companies provide this service for you as part of managing your money. They are a fantastic way for first time investors to experiment with the market and investing as a whole.
Finally, you will have a wide variety of choice of what type of fund you are going to invest into. No matter how much or how little you want to invest, how much risk your willing to take or what your short and long term goals are, there is a fund that will suit your needs.
Again its important to state no form of investing is completely risk free, mutual funds provide a wide range of options that are perfect for first time investors and seasoned pros, alike. For a growing number of investors, mutual funds are the best investment vehicle available.
Please visit our website at [http://www.007aj.com]http://www.007aj.com. We release at least 3-4 new articles per week on a variety of topics related to wealth building, successful investing techniques and investing mistakes.
Article Source: [http://EzineArticles.com/?Key-Benefits-Of-Investing-In-Mutual-Funds&id=7564561] Key Benefits Of Investing In Mutual Funds
Types of Investments
Showing posts with label mutual funds. Show all posts
Showing posts with label mutual funds. Show all posts
Sunday, June 16, 2013
Thursday, May 30, 2013
The Best Funds For You
Types of Investments
The Best Funds For You
By [http://ezinearticles.com/?expert=Angela_Stephan_Heasley]Angela Stephan Heasley
Stocks and shares scare most people, so it obviously would not be smart to invest our money in something that we don't understand or are not sure about. There are of course several safe investment areas available to us, but we are required to understand and analyse these as well before we simply invest our money. We need to be smart about our investments and put our money into investments that would give us the highest returns. While investing through big investment companies may seem like a good way to gain returns, we have no control over the gains we earn. Mutual funds performance is out of our hands, and we are unable to customise these funds according to what we need and require. There is also a high fee to pay to avail of these services and the time taken to get returns is long and uncontrollable. Even though there are several types of mutual funds available to us, the drawbacks of all are the same, so people who are looking for safe returns fast are at a loss in the mutual fund market.
For people who are still looking to make collective investments, the safer option would be the Index Fund. This type of fund is different, as it aims to recreate the movements of a specific market, and market conditions are not very important. To avail of such a fund, the fee required is minimal, however returns are not minimised. The low-cost of this fund makes it appealing and also accessible to people who are at the lower end of the income bracket. It is also easy to manage these funds, and the investment objectives of such a fund are easy to understand. These funds are simply rebalancing every six months or every year. Style drifts are not possible with these types of funds, so diversification of a portfolio is more accurate and can easily be increased.
The turnover expected from these funds is lower, as they are passive funds and not active funds. This means that capital gain taxes are not applied to these funds and so the investor need not pay the taxes that would come along with a high turnover rate. Investing in different types of funds eventually lies on the person and what kind of returns there are looking for, but in the end the safer way to invest would be through a fund that offers higher returns with low investments, and has a nearly hundred per cent accuracy rate of being able to predict the returns a person will gain..
[http://www.utimf.com/FundPerformance/Pages/default.aspx]Mutual funds performance affected by various factors like mutual fund type. The safer investment option would be [http://www.utimf.com/Funds/equity-funds/Pages/uti-nifty-index-fund.aspx]index fund.
Article Source: [http://EzineArticles.com/?The-Best-Funds-For-You&id=7665865] The Best Funds For You
Types of Investments
The Best Funds For You
By [http://ezinearticles.com/?expert=Angela_Stephan_Heasley]Angela Stephan Heasley
Stocks and shares scare most people, so it obviously would not be smart to invest our money in something that we don't understand or are not sure about. There are of course several safe investment areas available to us, but we are required to understand and analyse these as well before we simply invest our money. We need to be smart about our investments and put our money into investments that would give us the highest returns. While investing through big investment companies may seem like a good way to gain returns, we have no control over the gains we earn. Mutual funds performance is out of our hands, and we are unable to customise these funds according to what we need and require. There is also a high fee to pay to avail of these services and the time taken to get returns is long and uncontrollable. Even though there are several types of mutual funds available to us, the drawbacks of all are the same, so people who are looking for safe returns fast are at a loss in the mutual fund market.
For people who are still looking to make collective investments, the safer option would be the Index Fund. This type of fund is different, as it aims to recreate the movements of a specific market, and market conditions are not very important. To avail of such a fund, the fee required is minimal, however returns are not minimised. The low-cost of this fund makes it appealing and also accessible to people who are at the lower end of the income bracket. It is also easy to manage these funds, and the investment objectives of such a fund are easy to understand. These funds are simply rebalancing every six months or every year. Style drifts are not possible with these types of funds, so diversification of a portfolio is more accurate and can easily be increased.
The turnover expected from these funds is lower, as they are passive funds and not active funds. This means that capital gain taxes are not applied to these funds and so the investor need not pay the taxes that would come along with a high turnover rate. Investing in different types of funds eventually lies on the person and what kind of returns there are looking for, but in the end the safer way to invest would be through a fund that offers higher returns with low investments, and has a nearly hundred per cent accuracy rate of being able to predict the returns a person will gain..
[http://www.utimf.com/FundPerformance/Pages/default.aspx]Mutual funds performance affected by various factors like mutual fund type. The safer investment option would be [http://www.utimf.com/Funds/equity-funds/Pages/uti-nifty-index-fund.aspx]index fund.
Article Source: [http://EzineArticles.com/?The-Best-Funds-For-You&id=7665865] The Best Funds For You
Types of Investments
Monday, May 13, 2013
What You Should Know Before Investing in Equity Linked Savings Schemes
Types of investments
What You Should Know Before Investing in Equity Linked Savings Schemes
By [http://ezinearticles.com/?expert=Radha_Reddy]Radha Reddy and G Rajasekhara Reddy
Equity Linked Savings Schemes are popularly known as ELSS Mutual Funds. They are open ended mutual funds with a lock in period of three years. The lock in period is for availing tax benefits under Section 80C of Income Tax Act 1961. Although, there is no limit for investments in ELSS Mutual Funds, maximum tax exemption is available for an investment up to 1,00,000 rupees.
ELSS Mutual Funds have the shortest lock in period of 3 years compared with other similar tax saving investments. For example, bank fixed deposits have a lock in period of 5 years to avail tax exemption. These funds invest more than 65% of funds in equity and related instruments and are eligible for Long Term Capital Gains (LTCG) Tax exemption. Moreover, all the dividends paid by the scheme are tax free in the hands of the investor.
Investments in these funds can be done either as a lump sum payment or through systematic investment plan. It is advisable to invest through SIP which has rupee cost averaging benefit. Most people rush to invest in these tax saving funds in the end of March. This last moment investment may not be optimal for investors as with systematic investment planning. Minimum investment is 500 where as in other funds it is 5000 rupees. Both dividend and growth options are available. Choose the option as per requirement and once opted a choice, it is not possible to change it during lock in period.
Although these funds offer shorter lock in period, multiple tax benefits, they are not suitable to all investors. Investments in equities and related products have high market risk. These are subject to high market volatility. There may be loss of capital too while investing in equity linked products. Before investing in such schemes one must check whether they are suitable for their risk profile.
Although, equities are volatile and risky in short span of time, they provide higher returns. As an asset class equities provide best inflation adjusted returns in long term.
It is true that past performance of any mutual fund may not be repeated in future. But studying the performance of the fund over longer periods can give more predictable future performance of the fund.
It is a good idea to link your investments in mutual funds to a long term goal which has emotional bearing. It can be buying necklace to wife, Child marriage and so on. This will help to reduce the temptation of redemption without major reason. Most investors choose to redeem their investments when markets are performing badly. By doing so, they miss further appreciation opportunity.
You can see more details and comparison of various ELSS schemes see [http://teluguinvestor.com/blog/mutual-funds/elss-mutual-funds-multiple-benefits/]ELSS Mutual Funds
Article Source: [http://EzineArticles.com/?What-You-Should-Know-Before-Investing-in-Equity-Linked-Savings-Schemes&id=7559359] What You Should Know Before Investing in Equity Linked Savings Schemes
Types of investments
What You Should Know Before Investing in Equity Linked Savings Schemes
By [http://ezinearticles.com/?expert=Radha_Reddy]Radha Reddy and G Rajasekhara Reddy
Equity Linked Savings Schemes are popularly known as ELSS Mutual Funds. They are open ended mutual funds with a lock in period of three years. The lock in period is for availing tax benefits under Section 80C of Income Tax Act 1961. Although, there is no limit for investments in ELSS Mutual Funds, maximum tax exemption is available for an investment up to 1,00,000 rupees.
ELSS Mutual Funds have the shortest lock in period of 3 years compared with other similar tax saving investments. For example, bank fixed deposits have a lock in period of 5 years to avail tax exemption. These funds invest more than 65% of funds in equity and related instruments and are eligible for Long Term Capital Gains (LTCG) Tax exemption. Moreover, all the dividends paid by the scheme are tax free in the hands of the investor.
Investments in these funds can be done either as a lump sum payment or through systematic investment plan. It is advisable to invest through SIP which has rupee cost averaging benefit. Most people rush to invest in these tax saving funds in the end of March. This last moment investment may not be optimal for investors as with systematic investment planning. Minimum investment is 500 where as in other funds it is 5000 rupees. Both dividend and growth options are available. Choose the option as per requirement and once opted a choice, it is not possible to change it during lock in period.
Although these funds offer shorter lock in period, multiple tax benefits, they are not suitable to all investors. Investments in equities and related products have high market risk. These are subject to high market volatility. There may be loss of capital too while investing in equity linked products. Before investing in such schemes one must check whether they are suitable for their risk profile.
Although, equities are volatile and risky in short span of time, they provide higher returns. As an asset class equities provide best inflation adjusted returns in long term.
It is true that past performance of any mutual fund may not be repeated in future. But studying the performance of the fund over longer periods can give more predictable future performance of the fund.
It is a good idea to link your investments in mutual funds to a long term goal which has emotional bearing. It can be buying necklace to wife, Child marriage and so on. This will help to reduce the temptation of redemption without major reason. Most investors choose to redeem their investments when markets are performing badly. By doing so, they miss further appreciation opportunity.
You can see more details and comparison of various ELSS schemes see [http://teluguinvestor.com/blog/mutual-funds/elss-mutual-funds-multiple-benefits/]ELSS Mutual Funds
Article Source: [http://EzineArticles.com/?What-You-Should-Know-Before-Investing-in-Equity-Linked-Savings-Schemes&id=7559359] What You Should Know Before Investing in Equity Linked Savings Schemes
Types of investments
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