 Free Online Articles Directory |
|||||||
Home Page  Business Home Business Mutual Funds as a Long Term Investment |
|||||||
 |
Mutual Funds as a Long Term Investment
Mutual Funds are a long term investment. Period. Nothing short-term about them, no day trading. They are meant for the serious investor that is willing to take the time needed to grow their wealth over a long period of time. Why are mutual funds like that?
Well, a mutual fund is a collection of stocks, bonds or money market securities, which have been bundled together in one offering based on not only the goal, but the past performance of the individual components. They are taken as a whole, and as such, when some of the holdings in a fund rise, others may be falling, so the growth potential is not as extreme as, say, just one stock or bond. Over time though, mutual funds, can grow up to 8-9% a year, while the stock markets can gain anywhere from 10-11%. There are a variety of mutual funds that an investor can hold. Some examples are Bond Mutual Funds, which are mutual funds that are comprised of bonds that are offered by a company, State or Federal Government, or Mortgage and Asset-backed bonds. Another type of mutual fund is the Stock Mutual Fund, or Equity Fund, as some have coined it. These funds are comprised of holdings in various stock companies, and as such, can be a bit riskier due to the volatility of the stock market. You can even invest in a Precious Metals Funds that invest in Gold, Silver, Platinum, Palladium, and even Rhodium. When an investor contributes to a Precious Metal Funds, they will receive a certificate that represents the holding. There are some terms associated with Mutual Funds that the investor should be aware of. The first is the Net Asset Value, or NAV, for short. The NAV is a calculation that takes the Funds total assets and minuses the total liabilities. This calculation is done daily, at the end of trading, to reflect the true value of the Fund. Another term is liquidity, which is used to describe the amount of time it takes to convert the investment to its cash equivalent with the minimal amount of fees or price discount. Mutual Funds are not known for being liquid, that’s why we started out saying that they are a long term investment. One of the most important factors in dealing with Mutual Funds is the Prospectus. The prospectus is a legal document that contains information about the Mutual Fund, such as what holdings are invested in, what the goal of the fund is, what the past performance of the fund, listing of fees, the manager of the fund, the risks of the fund, and the strategy to achieve the optimal investing balance. Anytime you have a question about a Mutual Fund, you can always refer to the Prospectus, and you can always have one mailed to you, or made available to you through download, when searching for a Mutual Fund to invest in.
Rate this Article:
Current: 0 / 5 stars - 0 vote(s).
Article Tags: Mutual Funds, Nav, Liquidity, Prospectus, Net Asset Value, Bond Funds Article Source: http://www.articlesbase.com/home-business-articles/mutual-funds-as-a-long-term-investment-476739.html About the Author:
If you want to learn more about Mutual Funds, or other investment options like Bonds,you can visit www.firecreeksystems.com for more ideas and information.
Related ArticlesMutual Funds as a Long Term Investment Retirement Planning: A Solid Solution Investing in Mutual Funds Tramita Funds Have Consistently Posted Positive Returns Since the Company's Founding in 2003 The Three- Legged Investment Stool Should You Invest In Mutual Funds Or Stocks? Be A Responsible Investor! 3 Rules You Need to Know About 401ks Before You Change Jobs Got a Question? Ask.Ask the community a question about this article:Frequently Asked Questions How long do you need to keep old bank checks? old ... Looking for the headset and mic adapter for a sts ... Question College money safe haven in volatile times Am i gonna lose money on these mutual funds? What is the right time to start with stock investing? Q&A Powered by:
 Latest Home Business ArticlesMake Money With Adsense - Secrets of Cash Revenue Revealed Grow Your Bead Jewelry Business With Non-Traditional Pieces Abundant Living System- First Class Training for Your Success! All You Need to Know About Building Opt in List and Affiliate Marketing Advantages and Disadvantages in Business Structure - Is an S-Corp and an LLC Right For You? Holy Bingo! Keys to Internet Business Networking Sites The Most Easy Way to Earn Internet Cash More from RobertThe Mother of Storage Storage Containers Make Life Easy No More Sweeping Pain Thru Sedation Dentistry Showing a Perfect Smile With 6 Month Smiles Orthodontics Do Search Engine Placement Firms Pay Attention to Guidelines Internet Reputation Management Can Expose the Facts Installing Lawn Sprinkler the Easy Way Weight Loss and Dietplans |
|
|||||
|
Article Categories
|
|||||||
 Sign up for our email newsletterReceive updates, enter your email below
Use of this web site constitutes acceptance of the Terms Of Use and Privacy Policy | User published content is licensed under a Creative Commons License.
Copyright © 2005-2008 Free Articles by ArticlesBase.com, All rights reserved. (0.33, 17) |
|||||||
| Posted: 08-07-2008 | Comments: 
