MANAGED FUNDS

Regardless of how much money you have in the bank, diversifying your portfolio is always a wise idea in order to avoid putting all your eggs in one basket. The variety of products and choices available can seem overwhelming to the novice investor, but learning the differences between them can aid you in making educated financial decisions.

If you are interested in taking your savings to a new level, knowing how managed funds differ from individual stocks is a crucial piece of information.

Are you a go-getter who doesn’t let anything get in your way? If you answered yes, chances are you don’t want to leave the task of overseeing your managed funds to a stranger and plan on grabbing the bull by the horns. If you want to be successful at managing your own portfolio, there are certain things you need to consider before beginning the investment process.

• Understand the Risks: Managed funds are a great way for investors to easily diversify their portfolio. However, unlike some other types of investments, managed funds do not guarantee a positive return and the principal balance can actually depreciate if the managed fund loses value after your initial purchase. Additionally, there is no FDIC insurance coverage for managed funds.
• Know Your Goals: Are you looking to make a quick buck or plan on investing to meet long-term goals? As long as you can commit to a longer-term investment period, you may increase your odds of being successful in managed funds.
• Read All About It: If you are purchasing funds yourself, or even if you plan on hiring a financial professional, you need to know as much information as possible. Investment companies produce collateral material called a “prospectus” for all their securities, which details required disclosures, general terms and past performance. Understand, however, past performance is only an indicator of how a fund may do in the future and not a guarantee.
• Think Big: Managed fund options are plentiful. However, play it safe as you start out by mostly investing in bigger, well-established funds with good reputations to help you ease into the game. You can get an idea of where to start by asking trusted colleagues, friends and family about their investments and take it from there.

Earning more money is something that makes everyone happy, but that happiness is short-lived for some when they realize they have to pay taxes on that extra income. Those interested in minimizing fund taxes may consider investing in a tax-managed fund.

These investments were created by investment firms as a response to the number of investor complaints regarding capital gains taxes. When investors balked at having to pay extra taxes for gains they earned on successful investments, some firms began offering tax-managed mutual funds. These types of managed funds are meant to balance the amount of an investor’s taxes because the fund managers do the following:

Major stocks are expected to see an average increase of 10 percent in 2011, according to a recent Barron’s report. The study found big-cap shares like Exxon Mobil Corp, Wal-Mart Stores Inc. and Pfizer Inc. will be among those leading the way in increases this year.

2011 to Mark Another Year of Gains

ETF shares are very often the stepchild of investment portfolios because many investors don’t understand their value or simply don’t know what they are. That’s according to a new survey from Mintel Comperemedia that revealed many investors feel ignorant when it comes to this investment option.

Clueless about ETFs

Almost twenty years ago, Morningstar created a way for investors to quickly understand what type of mutual fund or stock they were considering buying. Most investors understand the importance of diversification across asset classes and the Morningstar Style Box allows you to easily classify stocks and spread your risk around different asset classes and investing styles.

Morningstar is the leading research company that provides independent research and analysis on over 350,000 stocks, mutual funds, commodities, futures, options and other investments to both individual and institutional investors.

Have you long had a desire to invest but just don’t know where or how to start? The world of investing can definitely feel intimidating because there’s so much to know and seemingly not enough time to soak it all in. However, there are some ways to slowly get into the investment game where you’ll feel comfortable with both the pace and the amount of money you’ve started with.

Let’s take a look at investing for beginners strategies that could, in a short amount of time, help you feel like the confident investor you aspire to be.

A managed funds is an investment that will allow you to put your money into an assortment of securities that tend to cover one specific industry. Like with any other type of investment strategy, it is important to look before you leap into the world of managed fund investments.

Setting Personal Goals

The first thing to consider before applying for a managed fund is your personal goal. Are you looking for quick gains or a long=term investment strategy? The performance of managed fund investments are not guaranteed. Something can always go astray with your managed fund investment and if you are not in the game for the long haul, you risk not having enough time for your investment to recover from the blow.

Investors who have relied on the security of a guaranteed money market mutual fund may be disappointed to learn that their investments are no longer government-backed. On Friday, September 18, 2009, the Obama Administration put an end to a program that was to guarantee as much as $3 trillion in money market mutual funds. The program ended on schedule.

At the height of the financial crisis in September 2008, a large money market mutual fund “broke the buck,” which means the value of its shares dropped below $1 for each investor dollar that was put in. Then investors saw major losses when the Primary Reserve Fund said that $785 billion that it invested in Lehman Brothers (which went bankrupt in the summer of 2008) became worthless.

Mutual funds are companies that pool money together from various investors then invest that money in various financial securities (stocks, bonds, money markets, additional securities and assets, or maybe a combination of all of these investment types). Also known as open-end companies, mutual funds allow investors to buy from them directly (or through a broker for the fund), rather than from a secondary market of other investors like NYSE or NASDAQ.

The History of Mutual Funds
Mutual funds (also known as open-end funds) have been in existence since at least 1924 when the Massachusetts Investors Trust was founded. However, it wasn’t until the Investment Company Act of 1940 that the mutual fund was officially recognized as one of three types of investment companies available in the United States, also including investment trusts (UITs) and closed-end funds. Since that time, they have grown in popularity because they offer low-cost investment options with ample diversification possibilities. Also, they allow for high liquidity, something many investors yearn for.