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Mutual Funds

3 Important Facts to Know Before You Invest in Mutual Funds

3 important facts to know before you invest in mutual funds

Here are three facts that are the bare bone necessities to know before you start to invest in mutual funds. In this series, I will give you information little by little about mutual funds until I feel you have a great grasp on the topic, and can choose your own high quality funds.

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1. WHAT IS A MUTUAL FUND?

A mutual fund combines money from several investors to invest in different types of investments or investment companies. The investments could be stocks, bonds, money market instruments’ or other types of investments.

Each investor in the mutual fund hold a proportion of the investment in the way of shares. There are low-risk, mid-risk and high risk mutual fund companies, as well as low earning and high earning companies.

One mutual fund company is typically very diversified and can invest in as many as 400 companies or as few as 40 companies. Diversity is what takes much of the risk out of mutual funds.

Important facts to know about mutual funds

2. HOW DO I PURCHASE A MUTUAL FUND?

Stocks are purchased from stock exchanges, such as the New York Stock Exchange, usually through a brokerage office or online broker. Mutual funds are baskets of stocks and can be purchased from a variety of places.

Mutual fund shares are purchased from the mutual fund company itself or from a broker. When you are educated in mutual funds, which I intend to do, you can easily purchase your own mutual funds online at any number of investment companies.

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3. WHO OVERSEES THE MUTUAL FUNDS I INVEST IN?

Registered and licensed Investment Advisers, in a team or individually, manage investment portfolios of mutual funds.

Investors have an advantage, by using the expertise and experience of the advisers.

You can go to sec.gov or finra.org to verify that your adviser is a registered investment adviser.

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5 Frequently Asked Questions About Mutual Funds For Women

Frequently asked questions about mutual funds

5 Frequently Asked Questions About Mutual Funds For Women
I have given a lot of lectures about mutual funds for women. I like mutual funds because, if you do your research you can purchase low-cost and low-risk mutual funds on your own. Mutual funds are easy to understand and invest in. You can do it yourself once you have done some research. Here are five of about twenty-five of my most frequently asked questions about mutual funds by women I lectured to. After a few decades of successfully investing in mutual funds, I felt it is only fair that I share my expertise with you.

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  • ARE MY MUTUAL FUND INVESTMENTS GUARANTEED AT ALL?

Insurance is provided by the SIPC, which covers fraud. In other words, if you invest your money in company “C”, a registered investment company (registration with finra should be checked), and it is stolen by the President of Company “C”, you will be covered for up to $500,000 for each account, depending on the circumstances. Example: If a husband and wife have a joint account it is covered up to $500,000, if the each have additional retirement accounts in their separate names, the retirement accounts each are covered up to $500,000. Here is the SIPC insurance breakdown.

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  • WHAT ARE THE ADVANTAGES OF INVESTING IN A MUTUAL FUND?

With a mutual fund you will get professional management, diversification, an affordable investment, and it is liquid. This is one of the main reasons that I encourage investors to invest in mutual funds, after reading my frequently ask questions about mutual funds. It only takes a little research and study to master mutual funds, but because there is a learning curve I encourage you to master them first.

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  • WHAT ARE THE DISADVANTAGES OF INVESTING IN A MUTUAL FUND?

You still have costs even when returns are negative, you don’t control the investments totally, you don’t know for sure if the price will go up after you purchase – but after research you can verify that you are getting a quality mutual fund where there is a good chance the price will rise in the future. If you invest on your own you can keep cost low and more money will go to you, but if you go with a broker, you will be required to pay brokers fees which are sometimes hidden and costly.

  •  YOU CAN EARN MONEY FROM YOUR MUTUAL FUND IN THREE WAYS

Dividend Payments — A fund may earn income in the form of dividends and interest on the securities in its portfolio. The fund then pays its shareholders nearly all of the income (minus disclosed expenses) it has earned in the form of dividends.

Capital Gains Distributions — The price of the securities a fund owns may increase. When a fund sells a security that has increased in price, the fund has a capital gain. At the end of the year, most funds distribute these capital gains (minus any capital losses) to investors. Most mutual funds pay money into your mutual fund account yearly, a few pay on a quarterly basis. This means if you pull your money from your mutual fund that pays out capital gains and dividends at years end, you will lose your profits.  So, be patient, and know your payout date.

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Compounded Returns – unlike simple interest accounts the interest on top of the dividends and capital gains will compound year after year, giving you compounded interest.

  • WHAT IS THE NAV OF MY MUTUAL FUND

Increased NAV (Net Asset Value) — If the market value of a fund’s portfolio increases (from dividends and capital gains), and after deduction of expenses and liabilities, then the value (NAV) of the fund and its shares increases. The higher NAV reflects the higher value of your investment. The more the NAV increases, the more money your investment will be worth. The NAV value can fluctuate from month to month or year to year, the important point to look at is that it has a net increase over time.

You have two choices:

Let someone else manage your money and end up with little or nothing OR learn some simple basic rules that could turn a little into a lot over time. I provide you with all the help you need in my eBook on Mutual Funds. I even give a 30-minute free clarification session after you read this article. The eBook I have written is clear and concise, after you finish it you will understand how to efficiently invest in mutual funds.

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I cover dozens of frequently asked questions about mutual funds in this eBook. Get this eBook and 7 more when you take the “Course for fantastic Finances”

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Why Women Need to Understand Investing Now

Investing Money for Beginners

Why women need to understand investing now

There Are No Guarantees if Women Do Not Understand Investing

Women need to understand investing now because there are no guarantees you will stay married or even get married, women need to know how to take care of their finances. This is the start of investing money for beginners. This includes learning stock mutual funds, bond mutual funds and simple index funds. With these three types of funds you can buy stocks inexpensively, with low risk and learn to read charts that are not difficult. 

But understanding investing now means you need to understand sane savings (my mantra), mega-money management (because everything is ultra-expensive), and investing (because you need to stay ahead of inflation to keep your money growing).

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Far too many women are still taught to be financially dependent, even when you work, and many don’t get involved in family finances since you feel prince charming will be there to protect them forever. It is important to work together on finances, and staying out of family finances could have dire consequences foreither spouse. Stay involved in your family finances.

Divorce or Death Effecting Your Finances

Because you have at least a 50% chance of divorce and even greater chance of being separated from your spouse, it is imperative that you understand all the nuances of money, including investing. I focus on mutual funds because, 1. That is where my long term expertise and success is, 2. They are easy to understand once you put some “peddle to the metal” and study some of what I call, “mutual fund research”. 

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If you are not dependent on your husband to take care of all finances during your marriage, or an adviser if you are single, then you will know what to at any time, including with an illness, accident, or death. Dependency is not a good thing.

Many women fall victim to con artist who prey on women with money and no financial skills, because they are not familiar with the ease at which others prey on those without financial experience. Understanding stocks, bonds and mutual funds will create a knowledge bubble around you, that will keep you safe.

There are literally millions who have lost millions due to being trusting and naive. Don’t make yourself a victim by keeping your financial knowledge and skills very low. The potential for divorce or death from a spouse are a major reason why women need to understand investing.

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Protect Yourself Now and in The Future and Protect Your Money

There are many women who never write a check or pay a bill, after getting married. That is hard to imagine, but it exists. Writing checks and paying bills are a powerful way to keep yourself aware of family finances and the limitations of money.

Then you monitor investments in mutual funds, or other investments for savings, college, or retirement, this gives you another layer of awareness and will help protect your finances now and in the future. I speak to beginning investors all the time who can’t analyze the simplest investments. This is not acceptable. Teaching investing for beginngers is something I am passionate about so you can protect specialty finances. 

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Therefore, women need to understand investing. Social security is meant to be a supplement, that is why the payout is very low for most people. Your 401k can be overrun with success if you know investing money for beginners. If you have a pension or get your husbands pension from death or divorce you can still benefit from know how it invest money. 

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When you understand investing, the chances are good you will also understand how to grow your investment retirement account and hold on to the accounts build by you or your spouse. Understanding why women need to understand investing will create an entire class of new and capable investors, who can also teach their daughters.

Lois Center-Shabazz | Course Delta Agency

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Learn to Invest, Stocks to Mutual Funds

3 factors that make mutual funds special

3 factors that make mutual funds special

  1. Longevity

Mutual funds last and last and increase in value over time.

Many mutual funds display tried and true value. They have been around for decades and some of them are managed by people who have their own money in the fund. This is a plus because, “who wants to lose their own money”?

  1. The Research Reports

You know what you are getting with mutual funds because research reports are abundant and easy to read and clear.

There are many research reports where you can see how the mutual fund you are interested in has performed in 3 years, 5 years, 10 years and for life. To me, this is considered a wealth of information, and no one should ever purchase a mutual fund without reading the research reports for the fund. I can show you how to read these reports.

  1. Ease of Understanding

They are easy to understand with just a little bit of effort.

If you are willing to do a little work and learn where to get mutual fund reports and how to read the mutual fund reports, you will greatly increase your chances of making money on your mutual funds. Will this happen quickly, in a few cases yes, but in most cases like any other “investment” it takes time to make money. But, within that time you will make money if you put the effort into it.

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3 Ways Mutual Funds Are Cost Effective

Mutual Funds Are Cost Effective
3 Ways Mutual Funds Are Cost Effective

You Can Choose No-Load

Mutual funds are cost effective mainly because you don’t have to pay to buy a mutual fund. Some investments including annuities and high cost mutual funds decrease your profits as time goes on.

You can pay $0 per purchase, for a mutual fund bought directly form an investment company, or you can pay $8 for a mutual fund purchase through a broker.

This means every time you purchase shares in a mutual fund you must pay a load. In no-load mutual funds there are still other charges that will affect your profits such as yearly fees. You can choose quality mutual funds with low yearly fees. I can demonstrate how to find mutual funds that have low yearly fees for you.

You Can Choose Low Cost When It Comes to Yearly Fees

There are many high cost mutual funds, but you can choose low-cost mutual funds that will significantly increase your returns over time, since yearly fees are charged every single year.

 As stated above there are many factors to look at. I can show you all the fees involved to maximize your mutual fund returns and show you that mutual funds are cost effective.

You Can Choose Low-Risk

There are many types of mutual funds, just because a mutual fund is medium or high risk does not mean it is not a good fund.

I have made money on many medium and high risk mutual funds through the years.

 It only means that the ups and downs are less, and the risk of temporary decreases in value is much less. I can show you how to determine if you are a low, mid, or high-risk person. And I how to create a great mutual fund portfolio no matter what you are using it for. 

When you consider the load, the fees, and a few other factors, you will find mutual funds are cost effective ways to build your money.

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An Excerpt From My Mutual Funds eBook

Introduction to Basic Investing   

My mutual funds ebook excerpt

Would you give your baby to a stranger and tell them, I will be back to pick up my baby in 21 years? Make sure you take good care of him or her. Your answer should be an emphatic “no”, if you care about yourself, your baby, or your lives.

The same should hold with your financial future. Your saving and retirement investments. If you want to be successful accumulating money for future use, either the near future or the far future. Just like your children, you must know who is managing your money and what they are doing with your money, what the risk are and what the investment costs; rather stocks, mutual funds, CD’s, money markets, real estate or annuities. It all cost money to invest money, in terms of fees.

Online Investment Portals

Because of online investment portals, it is relatively easy to research and learn about investing well enough to analyze investments that your broker recommends. You can also monitor your investments at online portals and study the latest information about investments and investing.

Why I Wrote My Mutual Funds eBook

Some folks think you have to be rich to invest money. That is not true, and why I wrote the mutual funds eBook. You have choices of investing in your employee retirement account. You can save for college in an investment account, you can save for an individual retirement account, and save for general savings. All of these require basic investing knowledge by first reading this eBook and then going online to study investing in the online portals, then you can set up an account and monitor the progress.

I started investing a long time ago. First, I used brokers at brick and mortar companies. But, quickly became discouraged because I didn’t know what they were doing with my money. I worked hard for that money. I never had the fear that I was involved in a Madoff type investment firm (as you recall Bernie Madoff stole billions of dollars from investors in an illegal firm), because I used major investment companies.

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But, you can still lose your principle with major firms, if you use investment advisers who invest your money in high risk investments that go under. First of all, there are low risk investments that pay good returns over time, and very low cost investments, where the cost don’t eat up your returns.

After I used brick and mortar companies that didn’t tell me what they were doing with money, I started using online companies. I took classes, I read quality investment magazines, I read books, and then I talked to online investment advisers associated with my online investment company.

Investment Research

I also read a lot of investment research in my online investment portal. Knowing my investments, monitoring my investments, and getting top notch advice when I need it made all the difference in my bottom line.

By the time you finish this eBook you should know the difference between a high risk and low risk investment, a bond, mutual fund and money market account, and money market investment, and a stock. By the way, most investments and most areas of life are based on stocks. Stocks are the basic investment. Pretty much everything you use is derived from a company that invests your goods or services in “stocks”.

Mutual Funds Origin

Mutual funds are based on stocks, annuities are based on stocks. The other vehicle is bonds, the opposite of stocks. With both stocks and bonds — you have high risk and low risk in each category and you have high cost and low cost in each category.

There are other types of investments as well. The main caveat I always used is, “I don’t ever invest in anything I don’t fully understand”. I don’t care what ANYONE says, “if I can’t research it and understand it, I don’t invest in it”. I also make sure that any company I use is a registered investment company with a verifiable good reputation.

My Primary Investments

My primary investments are in mutual funds. They are especially good for beginners and busy people since they are professionally managed, you can find low risk funds, and low cost funds to invest in.

Do you want to be a vulnerable and confused person? or a Knowledgeable, happy and self-assured investor? You can start with my complete, easy to read and understand mutual funds eBook. Contact me with questions when you are done. Learn investing; From Stocks to Mutual Funds in 47 Ways.
Since mutual funds consist of a basket of stocks, I start the conversation with beginner stock knowledge.

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3 Reasons I teach Women to Invest in Mutual Funds

3 Reasons I teach women to invest in mutual funds

1.  I teach women how to invest in mutual funds because women frequently do not have knowledge of Investments

Investing and particularly how to invest in mutual funds, are generally not taught in grammar school or college. When investing is taught by parents or schools, boys are usually the target for investing education since they are the ones they feel will be the family wage earners.

Unfortunately, women are not encouraged to learn investing, instead they are taught the mantra, “don’t bother your pretty little head attitude”. I had a male vendor visiting my office noticing investing bulletins on my desk and ask me, “how did you learn about investing”.

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I told him, the same way men do. Then, he says “No, I mean, really how did YOU learn”. I ignored him since I knew that he was referring to the male stereotype of investing. I did not feel that was an appropriate question.

Some women are partly to blame because they have the “Prince Charming Syndrome”. Even though women have made many advances in education, some women and their Dads are convinced that they don’t have to bother their “pretty little heads”. 

The theory is that Prince Charming is bound to come into their lives, even though it usually doesn’t work that way.

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  1.  Women Usually Live Longer Than Men

According to multiple news sources, women make less than men generally and that makes it even more essential to concentrate on understanding investments you can choose for your retirement. 401k accounts are made of mutual funds directly or in annuities that contain many mutual funds.

Either way, the more you know about mutual funds, the better your 401k will be since you can choose quality mutual funds in your account.

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We all know that women usually live longer than men. This means that if you inherit your husbands’ investment account you can manage it with impunity, you don’t have to rely on an outside person. This is especially important since elderly people are frequently the target of unscrupulous investment advisors.

Remember Bernie Madoff, there are many mini-Madoff’s, as I call them, known as lower-level investment scammers. This is a critical reason I teach women to invest in mutual funds.

  1. Women Usually Invest in Simple Low-Profit Investments

Because women don’t usually get investment education, they don’t have quality investment knowledge. The consequence is that they frequently choose low interest simple investments like CD’s and Money Market accounts losing out on years of high interest quality accounts like mutual funds, blue chip stocks, and bonds.

The difference in your balance can amount to hundreds of thousands to millions in losses.

Understanding mutual funds is not difficult, when you get the right information.

Learn How I can teach you to understand mutual funds like a pro

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Personal Finance: Author, Blogger, Course Creator, Money Strategist

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3 Common Types of Mutual Funds

 

Types of Mutual Funds

There are many types of mutual funds within these three types of mutual funds. Here are the 3 different major types of mutual funds. The risks of mutual fund investing runs the gamut. There are very low risk to very high and many levels in between, within one type of fund.

Do your research thoroughly before investing, use my easy to understand ebook and course for research. Your understanding of   mutual funds will skyrocket.

My experience with mutual funds is long and wide. The information I share with you reflects my decades long experience. 

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1. Allocation Mutual Funds
Risk: Low to Medium

Allocation mutual funds are a combination of stock and fixed income securities and are subject to the risks involved in each of these security types.

Stock markets are volatile and can fluctuate significantly in response to company, industry, political, regulatory, market, or economic developments. In general, the bond market is volatile with fixed income securities that carry the interest rate, inflation, price volatility and other risks. Another way to invest in mutual funds is in bond mutual funds.

types of mutual funds

2. Alternative Mutual Funds
Risk: From Low Risk to High

The mutual fund may invest in securities that may have a leveraging effect (such as derivative and forward-settling securities). This may increase market exposure, magnify investment risks, and cause losses to be realized more quickly.

3. Money Market Mutual Funds
Risk: Very Low

A money market mutual fund is a type of fixed income mutual fund that invests in debt securities. They are characterized by their short maturities and minimal credit risk. You could lose money by investing in a money market fund, but the chances are nominal.

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An investment in a money market fund (different from a money market saving account), is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Before investing in mutual funds always read a money market fund’s prospectus for policies specific to that fund.

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There are many types of mutual funds which I cover in my full Fantastic Finances Course. 

3 Common Types of Mutual Funds

Learn to Invest: From Stocks to Mutual Funds in 47 Ways Will Clarify Mutual Funds for You.

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