Stocks Or Mutual Funds Investing?

Because of the busy lifestyle of most people, they prefer things to be simplified. This is where investing guides come in. Now, you have a chance to better understand car or automobile, insurance, personal loans, mortgage, retirement, and investment. All the concepts that you need to learn are given in simplified form and even if the book or guide is a bit long, you will be able to read it with ease since the terms are understandable – without the technical jargon.

Investors are in need of solid information about mutual funds and stocks. If you want to start transforming debt into wealth, you must grab quality newsletters and guides to make you a better investor. You have to learn the basics or fundamentals of investing.

If you’re a beginner, you should try to invest on mutual funds. This is a great way to test the waters and since professional investors are the ones managing your account, you get to earn profits even with little experience or knowledge. However, your investment efforts shouldn’t end there. Just imagine how much money you can make if you’re the one making the investment decisions and managing your own account! Don’t hesitate to learn the basics of the trade through several publications.

It is vital that you focus on quality publications that offer concepts that you need to learn and understand. You have to identify the risks involved with mutual funds and the ways to succeed. Make it a point to check the fee structure and other important aspects to help you come up with an informed decision.

Another option would be to invest in stocks. This is the ideal choice once you’ve mastered the investment of mutual funds. Since this is a fairly complex level, you will need to find the perfect investing guide. By doing so, you can invest on individual stocks and earn profits. There are many stocks info that you can read. Take your time and be sure to pick the right ones. The market game for stocks is different in comparison to mutual funds. Without adequate knowledge, you can lose out a lot of money.

Are you thinking of transforming debt into wealth? This is the time to start your research. If the info sources you’ve found are too complicated and you hardly understand the contents, look around for more simplified materials. A lot of people don’t want to admit their ‘dumb’ especially in the world of stock investing. Thanks to the investment guide, you get to learn everything you need to know.

The internet can make things and topics a lot simpler. All you have to do is sit down and do your homework. This is one of the most important things that you can invest when it comes to mutual funds or stock investments. You should be prepared and equipped with the right knowledge. When you’re ready, you will surely be able to earn a lot of profits. Find a simple guide today.

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The 3 Keys to Profitable Mutual Funds Timing

If you can accurately predict the direction of the stock market, you are in for some great investment profits. Unfortunately no one can do that religiously, but there are ways to approach this in a scientific fashion that offer the hopes of more certain fortunes.

Most people invest their money in mutual funds hoping that a rising stock market will pull up the price of their fund, but the key to bigger profits is picking the right type of fund based to start. But how do you do this? Years ago equity strategist Sam Stovall did a study showing that various sectors of the stock market went up or down at different phases of the business cycle. The way to beat the market was to invest in the best performing sectors at the right time. You picked your sector fund based on the phase of the market cycle. Today with ETFs and Vanguard or Fidelity sector funds, it is easy to have many funds to choose from that fit Stovall’s criteria.

What Stovall failed to reveal is the annual seasonal tendency of these sector funds, namely that there are certain times of the year, for each stock market sector, when it typically makes a price high or low. This information is very useful for investors who want to get in and out of fund sectors safely and who are intent on trading mutual funds with an active approach. Typically these traders use momentum and moving averages to get in and out of various funds, but if you know the average seasonal tendency of funds, this information, combined with trend following methods, can offer superior investment profits.

Here are the three things you need to know to do this for the best results…

First, to properly time sector funds for the best results, it helps to first know which stock fund or sector fund is likely to outperform the market. You start with a subset of the funds likely to outperform, and then you engage in mutual fund timing for buys and sells. You can use Stovall S&P sector rankings to identify the likely top funds, or you can simply keep track of the relative strength of various funds to see which ones are currently the market leaders, and take your bearings from there.

Second, you need to know the seasonal tendency of various funds, such as Fidelity or Vanguard sector funds if you are intent on mutual fund trading, to know when to expect yearly highs and lows you can take advantage of. This will help you in trading various stock funds because you will have an expectation for when to take signals and when to ignore possible whipsaw trading.

Third, you need some type of trend following system to signal when to get in or out of the sector mutual funds you are thinking of trading. When trading mutual funds, it not only makes sense to have a conviction on the top performers and their seasonal tendencies, but some technical analysis system that confirms when the funds have turned either up or down at the anticipated period.

Mutual Funds Vs Managed Accounts

There are some major differences in costs and efficiency between mutual funds and managed accounts that may have a meaningful effect on your investment returns.

Mutual funds are pooled funds, meaning all the money that you and thousands of other investors send to the fund company will be put into one large pool of money and the manager will manage this pool. If an investor wants to add new money or take out some money, it goes into and comes out of this pool. A managed account on the other hand is a private account, meaning that you have your own separate account which is not commingled with other accounts.

There are three main cost components in a mutual fund:

1) internal expense ratio-the incidental day-to-day expenses of the fund like the utility bills, rent, salaries, research etc.,

2) marketing, loads and 12b-1 fees that are incurred in marketing the funds and

3) transaction costs. These typically add up to anywhere from 1% to 3% or more annually for any mutual fund, even so-called “no load” funds. A great resource is John Bogle’s definitive bible called Bogle on Mutual Funds.

Managed funds typically can be had for 1% to 2% all-in if you can show your broker that you know the ropes. Much less if your accounts go into the 7 figures. With mutual funds, you are stuck with the common expense ratios no matter how much money you invest.

The most crucial difference to me is the efficiency factor however. If you picture yourself as the manager of a fund, you will be looking at valuations and buying when things are cheap, ie. when the markets are down, and selling when things are expensive, ie. when markets are up. Unfortunately, most fund managers are forced to do the exact opposite because of a phenomenon knows as the Small Investor Effect. The theory-and proven fact-is that the typical investor buys funds when the markets are doing well and sells when they are not. The Fear & Greed effect in action. That would be OK to us except that this activity puts the fund manager in a bind and forces him to sell when the markets are a buy and buy when the markets are a sell, effecting us all as shareholders. Separate or managed accounts were invented partly for this reason and in theory, they avoid this serious drag on performance-as long as we trust the manager to do his thing and not interfere with our own fear and greed impulses.

Most of the time, managed accounts are the way to go if you meet the minimums required, typically $50,000 to $100,000. Many mutual fund managers also have their brand private or managed accounts. There are times however, when a mutual fund is the right choice. A 401k plan or an IRA where you are adding fixed amounts periodically would be a good example because you cannot do that efficiently in a managed account.

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