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How To Find High Performing Mutual Funds For A High Performance Portfolio

Finding high performing mutual funds investments for a high performing portfolio is simple when you have a little research. Great mutual funds are a result of a stock market that has been going up consistently for the past few years, and is posed to continue on the current positive course. Therefore, now may be the time to research quality mutual funds.

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Mutual Funds

1. Definition of High Performing Mutual Funds

There are literally thousands of quality mutual funds to research, the small list below will get you started. First there are a few things you should know. Mutual funds are used for your 401k, regular savings or investing.

You can purchase most high performing mutual funds from an online. Buy from brokers such as Fidelity Investments, Charles Swab, TD Ameritrade.

Or you can go directly to individual mutual fund company websites such as Vanguard Mutual Funds, T. Rowe Price, American Century, Parnassus, Permanent Portfolio and others. These are all low cost mutual funds.

Those I mentioned here happen to be among the largest companies, but there are many others to choose as research candidates. Most of the discount brokers offer free mutual fund research as well as Yahoo Finance, MSN Finance, and Google Finance all under the mutual fund channel.

Understand How to Research Mutual Funds From a Money Strategist

2. Finding High Performing Mutual Funds

To find high performing mutual funds you must look at cost of the fund, returns, tax Rate, and asset allocation are 4 of the major categories I look at when I research a mutual fund.

There are many more you will find when you read mutual fund reports listed on the financial websites, and in the prospectus.

It is imperative that you know what you are buying before you buy it. Re-Read the prospectus of the mutual fund you are interested in several times prior to purchase decisions.

All of the following mutual funds mentioned are no-load funds. The following facts are current as of March
2011, they were taken from several mutual fund rating companies.

3. Cost Or Expense Ratio of Funds

Cost is most important for  high performing mutual funds because the performance of mutual funds go up and down over time as do most investments.

The lower the cost, the more money goes to your investment. If your mutual fund goes way down, a high cost may be challenging. A reasonable cost almost goes unnoticed if the fund performs well over time.

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Keep as much of your investment as possible by focusing on low cost mutual funds. If you are a beginner it is good to focus on mutual funds that are listed as low cost and low risk.

Most of these funds do not require a load or upfront cost unless you cancel the fund before 30-90 days. Each fund varies, read the individual fund prospectus.

4. Returns of Mutual Funds

High performing mutual funds have high returns and are calculated after all costs are deducted. A great one year return may be a fluke.  I like to look at the longer returns of the mutual fund. After all, an investment is the increase in value of an instrument over time.

I prefer to look at the 5 and 10 year return of mutual funds to get a broader picture. If the 1 and 3 year returns are high also, that may be the sign of a winner.

Bear in mind you must read the recent news and statistics of your mutual fund, because past performance is no guarantee of future performance.

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5. Allocation of Mutual Fund Assets

You don’t need a lot of mutual funds if you choose quality, since a mutual fund usually consists of a diverse mix of stocks. There are different types of mutual funds. So if you choose to own some they should be of different asset allocation groups, to avoid overlapping investments.

Some of the different types of asset allocation groups are: Large Growth, Small Growth, Large Value, Short-Term Bond, Mid-Cap Value, Diversified Emerging Markets and many more.

When you go into an online investment area read about each different type of mutual fund available. If you are a beginner it may be a good idea to study the  low risk, low cost mutual funds first.

6. Taxes Paid on Mutual Fund Profits

All of the funds listed below have low turnover, and therefore low tax rates. The turnover rate is the rate at which stocks in the fund are bought and sold. If the stocks are kept long term, they will be subject to long term capital gains tax, which is amongst the lowest taxes to be paid.

7. These are current Mutual Funds with Top Standings in the Respective Categories

Portfolio 1

Parnassus Equity Income Portfolio (PRBLX)
Type: Large Blend
Risk: Below Average
Yearly Expense Fee: .99
Return To Date: 3.7%
Return 1 year: 17%
Return 3 year: 5.9%
Return 5 year: 7.3%
Return 10 year: 7.0%
www.parnassus.com

Permanent Portfolio fund (PRPFX)
Type: Conservative Allocation
Risk: Above Average
Yearly Fee:  .93
Return To Date: -.07%
Return 1 year: 20.4%
Return 3 year: 8.0%
Return 5 year: 9.5%
Return 10 year: 11.0%
www.permanentportfoliofunds.com

Yacktman Fund (YACKX)
Type: Large Blend
Risk: Average
Yearly Fee:  .93%
Return To Date: 1.7%
Return 1 year: 8.47%
Return 3 year: 12.1%
Return 5 year: 9.4%
Return 10 year: 11.82%
www.yacktman.com

These are just a few examples of high performing mutual funds, there are many. You will find the quality mutual funds when you do your research.

This is not a solicitation to buy a mutual fund. These are only mutual fund suggestions for you to research. Read the mutual fund prospectus before you consider purchasing a mutual fund. Most are available online, at each mutual funds website.

These mutual funds were given a top rating by at least 7 different mutual fund research sites.

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How to find high performing mutual funds investments for a high performing portfolio

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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Learn to Invest, Stocks to Mutual Funds

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.

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9 Great Ways to Understand Mutual Funds

How to Understand Mutual Funds

9 Great Ways to Understand Mutual Funds

Understand mutual funds by beginning with the definition of a mutual fund, and then going on to understand the different types of mutual funds.

A mutual fund is a company that pools money from many investors and invests the money in securities such as stocks, bonds, and short-term debt.

The combined holdings of the mutual fund are known as its portfolio. Investors buy shares in mutual funds. Each share represents an investor’s part
ownership in the fund and the income it generates.

What Are Mutual Funds Used For?

Mutual funds are investments that are generally long-term investments that are used for general savings, retirement savings, and college fund savings.

Mutual funds are purchased because they are professionally managed, diversified investments, an affordable investment, and liquid.

Some have up front fees to purchase and or sell called loads. Some have no-loads, but all have yearly management fees from as low as .2 to 8%.

I prefer fees less than 1% with no-loads. There are good mutual funds that fall into all categories.

Mutual funds make money when dividends are paid, usually every 3 months to every 12 months. Capital gains are usually every 12 months. Mutual funds also make money when the NAV value of the fund increases. The NAV is the Net Asset Value of the mutual fund, similar to the price of a single share of stock.
There are many types of mutual funds within these nine types of mutual funds. Here are the 9 different major types of mutual funds. The risks of mutual fund investing runs the gamut of very low to very high and many levels in between within one type of fund. Do your research thoroughly before investing in order to understand mutual funds.

I have invested in mutual funds for at least 30 years now, and they have served me well.

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The 9 Different Types of Mutual Funds:

1. Allocation
Risk: Low to Medium

Allocation 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 and fixed income securities that carry the interest rate, inflation, price volatility and other risks.

2. Alternative
Risk: From Low Risk to High

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

3. Commodities
Risk: High

The commodities industry can be significantly affected by commodity prices, world events, import controls, worldwide competition, government regulations, and economic conditions.

4. International Equity
Risk: Medium to High

Foreign markets can be more volatile than U.S. markets due to increased risks of adverse issuer, political, market, or economic developments, all of which are magnified in emerging markets. These risks are particularly significant for funds that focus on a single country or region.

Make absolutely sure your budget is in order before you begin to understand mutual funds and start investing.

5. 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 characterized by their short maturities and minimal credit risk. You could lose money by investing in a money market fund. An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Before investing always read a money market fund’s prospectus for policies specific to that fund.

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6. Municipal Bond Mutual Funds
Risk: Very Low to Low

The municipal market can be affected by adverse tax, legislative or political changes and the financial condition of the issuers of municipal securities. Interest rate increases can cause the price of a municipal bond to decrease.

7. Sector Equity Mutual Funds
Risk: Medium to High

Stock markets, especially foreign markets, are volatile and can decline significantly in response to adverse issuer, political, regulatory, market, or economic developments. Sector funds can be more volatile because of their narrow concentration in a specific industry.

8. Taxable Bond Mutual Funds
Risk: Very Low to Medium

In general, the bond market is volatile, and fixed income securities carry interest rate risk. As interest rates rise, bond prices usually fall, and vice versa. Fixed income securities also carry inflation risk, liquidity risk, call risk, and credit and default risks. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

9. U.S. Equity Stock Mutual Funds
Risk: Low to Medium

Stock markets are volatile and can fluctuate significantly in response to company, industry, political, regulatory, market, or economic developments. Investing in stock involves risks, including the loss of principal.

You will understand mutual funds when you begin with understanding the different types of mutual funds.

Lois Center-Shabazz | Course Delta Agency
Personal Finance: Author, Blogger, Course Creator, Money Strategist

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Your 3 Investment Stops To Start Investing

Don’t Let Negative Thinking Place You in Investment Stops, Start Investing Now

Here are 3 investment stops to start investing money for retirement, savings, vacation or just a rainy day. It is essential if you want to ever retire, you must know how to invest.

The 3 Major Investment Stops

I don’t have enough money to invest.
I have to pay off my bills first.
I have money to invest, but I am afraid.

What is stopping you from starting to invest? Three of the most common investment stops are listed above. What can you do to start yourself to invest?

There are many inexpensive ways to start investing. You can open an investment account with a broker that sells shares or partial shares of stocks.

You can open a mutual fund account with a mutual fund company that will allow you to start with a small amount of money. And finally, you will have to shed some old baggage about investing, for example, “I will start investing when I get my bills paid off,” or “I am afraid to invest.”

Start With the Right Investment Priorities:

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saving money, and student loans. Learning low debt strategies is essential.

You don’t have to have a lot of money to start an investment account.

There are mutual fund companies that will allow you to start an investment account for as little as one hundred dollars. You can add as little as twenty-five dollars a month.

The monthly additions work to significantly increase your account due to dollar cost averaging.  Low-cost, low-risk mutual funds have a tendency to be less complicated than stocks. But, low-risk dividend paying stocks of stable companies are a good research vehicle as well as mutual funds.

There are companies that will allow you to invest in a few shares or partial shares of stock starting with as little as eight dollars a month. Then, adding eight dollars a month to your account to purchase these shares or partial shares of stocks .

I have to pay off my bills before I start to invest.

It is a good idea to have your debt well under control before you start to invest. The interest rates on outstanding debts sometimes are in excess of the interest rates on investments. Coupled with compounded interest, high debt payments can be excessive.

There is an easy way to invest after you have your bills under control, that is to treat your investment as “just another bill.” Before you know it, you will have a significant investment account.

Do you have plenty of money to invest, but you are simply afraid? I think the term for that is, “fear of the unknown.” That is probably the easiest investment stop we address in this article.

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Then, you can go on to understand high level home buying tips, so you buy the best house for the best prices.  Now move on to my free discovery session and enjoy the preponderance of money information there.

Use these 3 investment stops and invest with the right knowledge

Lois Center-Shabazz | Money Strategist | Personal Finance Coach

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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.

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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.

slay your finances, learn common types of mutual funds

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.

Learn to Invest, Stocks to Mutual Funds

Lois Center-Shabazz | Course Delta Agency

Interested in a Free Discussion about how I can help you with Fantastic Finances? Let’s Chat – Make an Appointment Here

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Protect Yourself From Investment Fraud

12 Ways to Protect Yourself From Investment Fraud

Protect Yourself From Investment Fraud For Now and in The Future!

Some of you are active investors, want to be active investors in various investment vehicles and some of you will be indirectly affected by stocks, bonds, mutual funds or other investments. Those investments could come to you via your 401k plan, an inheritance or other means. My point is anyone could be exposed to the financial markets intentionally or unintentionally. Because of this, you need to know how to protect yourself form investment fraud.

The Enron company (stock symbol – ene) “stock” scandal has been widely reported in the news in October 2001. The company stock went from $83 to .25 cents in just one year. According to the widely televised news reports one possible reason was accounting improprieties.

The most widely speculated impropriety was over-reporting of earnings by some officers. While downright false accounting reports by major companies are rare, and difficult to detect, you need to protect yourself from these types of scandals. We ask the following questions and attempt to answer them here. How do these scandals occur? Who is most vulnerable to stock scandals? How can investors protect themselves from this and other types of stock scandals?

Although most investment firms and products are ethical and legal, investment schemes and frauds do exist within the securities industry. Con artists are quick to pick up on the newest hot investment prospects and the latest technology trends and use them as a basis for fraudulent investment schemes. Bernie Madoff of Madoff Investments is probably one of the most famous investment fraud schemes.

Many of those schemes are very enticing and very difficult to spot. Almost all of them depend on trusting investors willing to believe the con artist’s claim without question. It may be difficult to identify fraudulent schemes, but there are some red flags you can pay attention to and avoid becoming a victim. Here are some pointers.

  • Deal only with firms and individuals you have researched and trust.
  • Be skeptical of any investment opportunity that comes about as a result of an unsolicited telephone call, Internet offering or even a television advertisement if the product cannot be easily researched. Never invest without doing some research about the opportunity. The Federal Communications Commission regulates telephone solicitations and automated calls under the Telephone Consumer Protection Act. Provisions of that act require a person making calls to identify themselves and the name of the entity on whose behalf the call is being made.

They must also give you the telephone number where the person or entity may be contacted. Other provisions require the entity to place your name on its no call list upon a written request and prohibit unsolicited calls between 9:00 p.m. and 8:00 a.m. Obtain additional information by contacting the Federal Communications commission, www.fcc.gov or 1919 M Street NW, Washington, DC 20554,
phone- 1 (888) 225-5322. Verify that your broker is certified and/or licensed through the CFP board or Finra. The Certified Financial
planner is not necessary, just good, but being registered or licensed is the law.

  • Beware of glowing promises of high returns. Ask yourself why the promoter is so eager to share this opportunity with you, and remember that if it sounds too good to be true, it probably is.
  • Don’t invest in a product you don’t understand, do your reserch, do lots of reading. There are many online investment portals where you can learn basic investing.
  • Carefully analyze promotions offering high returns by investing in the latest technology developments. The promise of high returns is a red flag for investment fraud.
  • Resist the temptation to invest “right now” because “tomorrow will be too late.” Don’t be surprised if they follow that line by “We will have someone there within the hour to deliver the prospectus and pick up your check.” Another line is, “I will have my supervisor call you and explain everything”.
  • Never believe a salesperson when he says, “You don’t have to read the prospectus or contract. That’s just for the lawyers.”
  • Do not give  out your social security number, credit card or bank account information to people who solicit you.
  • Look for audited financial statements and review them carefully. Be leery of the absence of audited financial statements and scrutinize unaudited financial statements carefully because an expert third party has not attested to their accuracy. Question any financial statement projections to see if the expenses and profits appear reasonable.
  • Take notes of your conversations with your broker-dealer agent or investment advisor representative. Include the dates and times.
  • Always..always..always….read and understand the legally required offering documents; ask questions and insist on reasonable answers. Seek advice from a knowledgeable friend or consult with your financial advisor, and invest only after you have satisfied yourself that the risk in this particular investment agrees with your financial objectives. You can read the recent news on a stock, research here for stocks, and here for mutual funds, Fidelity Investments is a major firm that has a large, easy to use research section.
  • Save all records of transactions and correspondence. Never part with original documents.
  • When considering equity securities prices below five dollars per share or unit and a market value of $250 million,  these are penny stocks or microcap stocks. The risk of buying these stocks are extremely high. Be sure you receive, read and understand the lawfully required consumer protection information prior to conducting any business, read here to understand why microcap or penny stocks are, in many cases fradulent stocks.
  • Slick promoters know how to make investment fraud sound legitimate and inspire your confidence. That is why they succeed so often. If you feel you have been victimized, report the matter to your state corporation commission, division of securities and retail franchising. On the national level you can contact the Securities and Exchange Commission (SEC), or the National Association of Securities Dealers, inc. (NASD), via the websites. You might also want to contact an attorney to determine your rights or file an arbitration claim. Your prompt complaint may keep others from being defrauded and increase your chance of getting your money back.

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