Investment Holding Company

Keeping your money on your bank account is safe and a wise decision to make especially if it's bearing an earning interest rate while you have to consider the other method of collecting money in order to secure your future needs to a greater extent, that's how investing will accede your income. Don't infer yourself on where you can find an investment company that will serve you, just be open-minded with the possible risk and know the right strategy to lead you in a right place.

There is always a risk in anything you do; with proper research you can minimize that risk. Introducing a variety of Investment Company can help, if you know what you're doing it will lessen your worries and you can now decide on how much return of wealth you need to make.

In terms of strategy, some people use mutual funds to spread their investment to get nice range of stocks without having to do a lot more exploration. You don't need to be knowledgeable in everything in order for you to invest. You can still make an investment firms that can help you with your worries online. That is one important choice you could make for yourself.

If you're really unsure of it, it is better to ask a help from someone who has been doing it for years or take the following steps to proper investing method to manage your savings properly.

1. Evaluate your investor type or investment company. It is good to know the personality, plans and strategies of your ideal party. Make sure that the both troupe will engaged on your investing terminology and willingly discuss their strategies.

2. Understand the possible risk. There is always a risk especially with it comes to financial discussions, it can be confusing and fearful, but the longer you are associate with your marketing team, the higher the possible return of reward.

3. Select funds appropriate for your investment option. Find funds with a stable management team, and avoid funds with big turnover. Always remember that the higher fund-assessed will cut into your returns. Weigh all your options carefully to choose the right funds for your allocation.

4. Monitor your investments. It is usually forgotten but it is really important. Some funds are often added or remove from your plan options. Regular evaluation will help everything in balance and it ensures you to have the most appropriate choice for your situation.

With time and patience, you can make a good decision to move toward your investment goals. It is more effective to plan your future now.

Telekinitex International

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How To Calculate Mutual Fund Risk

Unfortunately many people have learned about mutual fund risk the hard way in the past few years. They assumed mutual funds were safe investments only to wake up one day and find that they had lost all or most of their money.

With this in mind many of us are wondering who to calculate mutual fund risk? There is no way to accurately predict the performance of a fund but there are methods of estimating the amount of risk involved. You should always do the risk calculation yourself because people that sell mutual funds often will not.

Read the Prospectus

Whenever you think of purchasing a mutual fund you should read the prospectus over carefully. The prospectus is a document that tells you all about the fund: it lists the management, tells you what the fund invests, tells you what fees it charges in and even lists its performance. Anybody selling a mutual fund is required to give you the prospectus by law. These documents are also available free online from most of the major funds. Yahoo Finance's Prospectus Finder can help you locate the prospectus for almost any fund.

Closely Examine what the Fund Invests In

A mutual fund is usually based upon a strategy or formula for investing that is designed to maximize gains and reduce risks. These formulas are not necessarily scientific and in many cases are based upon educated guess work or fund managers' theories.

Take a close look at what the fund is investing in such as stocks, bonds, commodities etc. If a large percentage of the funds are invested in a particular stock, trying running a Google or Yahoo Finance search on that security and see what its performance is. If you find the fund has invested in a lot of volatile or underperforming stocks it might be a good idea to look elsewhere.

Determine the Level of Volatility

Volatility means that investments gain and lose a lot of value quickly. If you are investing for the long term it can be bad because there are added costs to volatility. More volatile funds can make a big profit quickly but they can lose a lot of money quickly. It usually is not a good idea to put retirement savings in funds that are very volatile.

The way to determine if a fund is volatile is to take a look at its performance. There are a number of online tools that can help do this including Yahoo Finance's Mutual Fund Center. It is possible to see a fund's real performance here and learn the volatility.

Past Performance is a Good Indicator

A fund's past performance is often a good indicator of how it will do it in the future. If it was volatile in the past or lost a lot of money in recent years there is a strong possibility it will repeat that performance. If you can find similar funds and examine their performance you can also have a good indicator of what the fund might do.

Another interesting strategy is to check out the people that run the fund. The prospectus should list the fund managers and you can often learn about their past performance by running a search on them. Fund managers move from company to company and the media often tracks their moves. You could be able to learn what their strategies are and the results they achieved in the past.

It also pays to look at how stable the management is. One sure sign of volatility or questionable performance at a fund is constantly changing management. The sudden departure of a manager could mean something is wrong. So could a recently hired manager.

You will not be able to calculate or predict all mutual risk but it possible for an average person to learn how to pick a good or reliable fund. There is one surefire way not to learn mutual risk and that is to rely on the people selling the funds for all your information.

Steven Hart is a freelance writer and a Financial Advisor from Cary, IL. He writes about Annuity topics like Single Premium Immediate Annuities, What is an Annuity, and Current Annuity Rates.

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New Debt Funds Charge High Fees, Add Complexity to a Simple Process

Simply purchasing long puts on ETFs that invest in U.S. Government paper allows the buyer to profit from rising interest rates and falling bond prices. While speculative, this is not a particularly risky strategy (compared to short-selling) because, as with long call options, potential losses are limited to the amount the buyer pays to purchase the option contracts. Simply put, one cannot lose more than one puts it. In a Wall Street Journal article entitled "Bond Investing May Soon Have a New Math", Tom Lauricella reports on several new debt funds which seek to "make money even when interest rates rise--thus, when bond prices are falling." (Lauricella C7) Lauricella mentions several funds including Goldman Sachs Strategic Income, Loomis Sayles Absolute Strategies, and JP Morgan Strategic Income Opportunities.

In what amounts to a cautionary note to would-be investors, Lauricella says that "...these funds bring with them a host of unknowns [because] their strategies have never been tested by a meaningful rise in interest rates [and] their complexity...makes it difficult for investors to know what the funds are investing in and to judge their risks." (Lauricella C7) Tom is not kidding. In the prospectus for JP Morgan's Strategic Income Opportunities fund, clients are advised that the portfolio manager uses six "strategy allocations" to manage the fund, including "relative value strategies" which "seek to exploit pricing discrepancies between individual securities or market sectors...[using] (1) credit-oriented trades such as purchasing a CDS related to one bond or set of bonds and selling a CDS on a similar bond or set of bonds, (2) mortgage-dollar rolls in which the Fund sells mortgage-backed securities and the same time contracts to buy back very similar securities on a future date, (3) long/short strategies such as selling a bond with one maturity and buying a bond with a different maturity to take advantage of the yield/ return between the maturity dates, and (4) other combinations of fixed income securities and derivatives." (all from JP Morgan's Strategic Income Opportunities Fund Prospectus--the.pdf can be found at http://www.jpmorganfunds.com)

Now if all this is starting to sound complicated, that's because it is. In fact, it is unnecessarily complicated. Using Credit Default Swaps and mortgage-dollar rolls to achieve gains in debt funds when interest rates rise seems like overkill. In his article Tom Lauricella explains that "credit default swaps...are essentially insurance policies against a bond issuer defaulting on its payments...[and] have become a common tool among...alternative mutual funds for betting that a bond's price will decline." (Lauricella C7) While CDSs surely offer professional money managers a high level of flexibility as far as which individual bonds they bet against, there is simply no need to employ complex strategies to bet against the bond market. JP Morgan's Strategic Income Opportunities Fund charges investors an upfront load (read: fee) of 3.75% plus a total annual fund operating expense of 1.13%. Thats a total of 4.88% in fees during the first year an investor is in the fund! If the fund doesn't return at least 5%, the investor actually loses money in the first year. Investors then, are paying for JP Morgan to chase returns in the fixed income markets by implementing complex derivative-based strategies which seek to capitalize on "price discrepancies between individual securities" (JPMorgan Strategic Income Prospectus)

To be fair, the Strategic Income Opportunities fund also utilizes five other strategies in pursuit of superior returns--I only single out the "relative value strategy" as a way of demonstrating the complex nature of these new debt funds. Also, JP Morgan is only one company among many who are rolling out these funds, and if past performance means anything, I'm sure JP Morgan's fund will rank among the best in this new class of bond funds. Having said that however, there is no reason why investors should expose themselves to complex strategies and high fees simply to bet on falling bond prices. All an individual has to do is buy long puts on Fixed Income ETFs.

The only fees that will have to be paid are those charged by the broker to execute the transaction. It will surely be argued that this approach is not nearly as nuanced as that taken by the professional managers of the new alternative strategy debt funds. While this is no doubt correct, for the average investor, there are plenty of Bond ETFs to bet against. For example, one can purchase long puts on iShares Barclays 20+ Year Treasury Bond Fund, iShares Barclays 1-3 Year Treasury Bond Fund, SPDR Barclays Capital International Treasury Bond Fund, and/or iBoxx High Yield Corporate Bond Fund. All of those ETFs have options which would theoretically allow investors to bet against long term treasuries, short term treasuries, international government debt, and investment-grade corporate debt respectively. If these options aren't enough there are plenty more. Why pay an exorbitant fee to make a bet that you can make on your own in a manner that is cheaper and easier to understand?

Lauricella, Tom (2011, July 6). Bond Investing May Soon Have A New Math. The Wall Street Journal, p. C7.

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Everything You Need to Know About Mutual Funds

If you're looking for an easy way to invest your money over a long-term basis, then a mutual fund may be the perfect solution for you. The fund is comprised of many investors like you who pool their money together to buy assets managed by a professional. There are a few advantages that you should know about mutual funds.

It's an excellent way for new investors to get their feet wet. With a one-time investment, you'll be able to invest in a wide range of stocks. You won't have all of your eggs in one basket. Even if a few of the investments don't do well, chances are the losses will be made up for with other investments.

One of the next advantages that you'll learn about mutual funds is that your money will be managed by a professional. This is usually someone who has years of investment experience. You certainly won't have that if you're just starting out, so you'd be more likely to make mistakes with your money.

When trying to find out about mutual funds, it's vital that you read the prospectus. This will state the investment objectives as well as the strategies used to achieve those objectives. The prospectus also includes other important information such as investment risks, past performance of the fund, and fees.

When learning about mutual funds, you'll see that you'll be charged various fees for the benefit of joining the fund. There are a plethora of fees such as advisory fees, operating fees, administration fees, etc. You will have to pay these fees on a yearly basis regardless of how the fund is doing.

One of the most important things that you should learn about mutual funds is their net asset values. This is a measure of all of the fund's assets combined minus any liabilities. That number is then divided by the number of shares that are outstanding in the fund to come up with the NAV.

This figure is calculated at the end of the trading day. You will have to pay this amount upon joining the fund. If you're looking to get rid of your shares, then this is the amount that you will be paid minus any associated fees.

Mutual funds can be either open-ended or closed-ended. An open-ended fund enables anyone to join and invest however much they want. There is no limit to the amount of shares available. This isn't the case with closed-ended funds since there are a limited number of shares available.

It's also important for you to pay attention to load and no-load when learning about mutual funds. If you join a load fund, you will be required to pay an extra fee known as a sales load. This will reduce the amount of your initial investment, thereby slightly reducing any returns you get.

This doesn't mean that you should only join no-load funds however. You will need to take everything into account before making your decision about mutual funds. If the other associated fees are low enough, joining a load fund may not be such a bad idea.

There are many other things that you need to learn about mutual funds before investing in one. If you choose appropriately, then it's an excellent way for you to get long-term gains on your money.

For more information on everything you need to know about mutual funds please visit our web site by clicking here.

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5 Reasons to Re-Invest Dividends

Dividends are the method by which publicly-held companies share profits with stockholders.

In a mutual fund portfolio that has dividend-paying stocks, the dividends pass through to the fund participants. When the mutual fund declares dividends, the investor has a choice: receive payment of the dividends or re-invest the dividends by purchasing additional shares of the fund.

Here are five reasons to re-invest the dividends:

1. You can build the number of shares.

For dividend investors, the goal is to increase the number of shares over time. Each share that you purchase is credited with a dividend. As those dividends are re-invested, your share balance grows. Mutual funds make re-investment of dividends very easy. When you fill out the application form, there is a section that asks what you would like to do with the dividends. Check the box in front of "reinvest". The other choice is "receive cash payment".

2. There is no out-of-pocket cost to re-invest dividends in most mutual funds.

The declared dividends pay for additional shares. Even if you don't want to make further deposits to the fund, the shares you own will keep producing dividends. You certainly can invest more money in the fund if you wish. But whether you do or not, the dividends will keep increasing your share total.

3. You can dollar-cost-average.

When you choose to re-invest dividends automatically, the fund purchases shares at regular intervals: monthly, quarterly or semi-annually, depending on when dividends are declared. The share prices at these intervals will vary, sometimes higher, sometimes lower. Over time, your shares will have an average cost basis. The purchases made at lower prices will give you more shares, while the higher-priced purchases give you fewer shares--assuming a constant dividend amount. The concept behind the averaging is that you will have an opportunity to benefit from market downturns. When the market rises again, the additional shares purchased during the downturn may have greater growth in value and there will be more of them. Although averaging is a useful tool, the method does not offer a guaranteed result.

4. You don't need the income now.

Stock funds are meant as a long-term investment. Building the value of the investment portfolio takes time. And building the amount of dividends you want for income payments takes time. For most people, dividends are a good source of retirement income. Since you may not need the income now, why not re-invest the dividends to purchase additional shares? Good planning may give you the dividend income you want for a more comfortable retirement. As with any investment, there is market risk.

5. You can compound the yield.

The shares purchased with your out-of-pocket dollars will increase by the dividends paid. The dividends that are re-invested will buy more shares that will also pay dividends. There will be generations of shares purchased by dividends--and then dividends paid on those shares. There is a constant cycle of purchases and dividends emanating from the original investment. In addition, apart from the dividend yield, the share price has the possibility of growth in value over time.

One of the nicest aspects of owning shares of a dividend-yielding mutual fund is that no matter which way the market goes, every quarter when you look at your statement of account you will see that the number of shares you own has gone up.

Howard Feigenbaum is Registered Principal and Owner of Sharemaster, a Broker/Dealer firm that specializes in monthly dividend income funds.

"Do you know the only thing that gives me pleasure? It's to see my dividends coming in." - John D. Rockefeller

This article is a general discussion of the subject and is not intended as a solicitation or specific investment advice.

http://www.monthlydividendcheck.com/

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Regular Savings - Essential Investors Guide

How to open a regular saving account

A regular savings account is just like any other type of investment account, in that all a person needs to do is approach any of the banks, building societies or other financial organisations that offer them.

The best possible way to decide on which type of account to open is to look at not only the interest rate paid, but to also examine the amount of bonuses the specific institution will pay to its regular investors. Nearly all of the accounts will have a tax free allowance of £25 per month, with anything over being taxed by the Government depending on your tax bracket - meaning that this issue does not need considering by the consumer.

There are no real restrictions regarding who can open a regular savings plan, although many places often have a minimum and maximum age limit, with 16-55 being the most popular. Although it is partially tax free, it also will not affect the standing of any Individual Savings Accounts or ISAs that the customer already has.

Paying money in to a regular saving account

With most regular saving plans there is a minimum amount to be invested per month, although this is usually only around £15. Although this is only a small amount, failure to pay it will have significant impacts on the amount of bonuses the account may receive. While there is a minimum, there is no maximum amount that can be paid in per month, although only the first £25 will be tax free.

The advantages of a regular saving account

The main advantage of this type of savings and investments is that there is a guaranteed lump sum payable at the time at which the account matures, which is set when the account is created. This provides the insurance that should the institution invest the money poorly, it will not be lost - meaning that there is virtually no risk associated with this type of account.

Another advantage is when saving for children, child savings accounts can provide an excellent kick start to their adult life. If a parent starts saving just £40 per month for ten years, they can expect a minimum return of £5,220, with most actually coming in at more than that. Aside from Government sponsored schemes, there is no more effective way that a parent can save for their child.

If you are interested in reading more information about regular savings and investment plans then please visit the following links:

Scottish Friendly - mutual societies such as Scottish Friendly supply financial services products. Mutual societies are owned by customers, or members. As a result they have no shareholders to pay dividends to, or to account to, so they can concentrate on delivering products and services that meet the needs of their customers.

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Child Trust Funds - Essential Investors Guide

There are some situations in which it is used to generate a better future for a loved one. That is certainly the case when one is investing in a child trust fund. A child trust account can be used for investing money that will later be used to pay for some expense in the future. Typically, the money in the trust fund is used to pay for a higher education or for a first home. Regardless of what exactly the money is being used for, it is apparent that it is being used by a loved one for something that is important.

The primary reason to set up a children trust fund is to give the money you put in it time to grow to much larger sum. It is for this reason that you set up children trust funds when the person is still a child. You might have a couple of decades or so to allow that money to grow before they are going to use it. When doing this, you are giving them a much better gift than just saving the amount that you would have invested. If you are interested in how to set up child trust funds at this point, it is vital that you know some of the basics. The primary thing to know is that you are going to need to speak to an investment broker to set this up. For this kind of an account, it is important to speak to an actual investment broker.

Trying to use an online broker will not be able to get you the results that you are looking for. A child trust fund account is a special type of investment. It is not something that you are likely going to go into and mess with that much. What this means is that you are not likely to change the types of investments that are contained within the child trust fund account that much. As such, it is important that you have the right investment company handling this account.

Start searching for the right company and the right type of account for your child. This research can easily be done on the internet. You just need to look up any number of different comparison websites. They will lay out the options that each and every broker has to offer. From there, you just need to select the plan that you believe will be the best for your child in the future.

If you are interested in reading more information about child trust funds and investment plans then please visit the following links:

Financial Services Authority [http://www.moneymadeclear.fsa.gov.uk/] - this is a useful site that provides unbiased money advice to help you manage your money better.

Scottish Friendly - mutual societies such as Scottish Friendly supply financial services products. Mutual societies are owned by customers, or members.

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