Mutual Fund Investing

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I am planning to invest Rs 50,000 for the next 5 yrs in mutual funds of a corporate house. I want 40 % of my investments to be put in construction, 30% in steel, 20% in cement & 10 % in chemicals. However, is it a must for the fund manager to invest a significant portion of my investments in software sector for getting a high return ? Will the mutual fund house listen to my requirements or do they feel their pattern of investment will give higher yields than my required investment pattern ?

Best Answer

Mutual funds offer their schemes through an offer document. This document is unique for every scheme. It specifies the different areas in which the moneys collected will be invested. For industry specific funds, you can always get details of the industry they will be investing in. But it will not be possible to get a fund which will exactly match the pattern you require. No, mutual funds will not frame their investments according to your pattern or request. Mutual funds are managed by professionally qualified experts, hence their understanding and knowledge of investments usually is much more skillful than average investor.

When investing in a mutual fund, what is the difference in the minimun initial investment and the minimum IRA investment. For example the fund im looking at says the min. investment is $2500, min. IRA is $1000, subsequent $1000. Additionally how often must you make the "subsequent" investments?

Best Answer

retail mutual funds and funds held in a tax deferred acct usually have different minimums. in your case, for a taxable retail acct, you would have to start with $2500 and every time you added money, it would have to be at least $1000. They will let you set up a IRA with $1000, but you still have to add at least $1000 at a time. You dont have to make additional investments ($4000 annual limit for IRAs) Those are high mins... look at Putnam mutual funds for very low mins (currently waiving all minimums)

What is the best mutual fund to invest in right now?

Best Answer

Professionals get paid ... even when they are wrong. Today's best mutual funds may be the worst in a couple of years. Consider indexing funds.

i'm a novice in investing in mutual funds. i came to know that MF investing would give huge gains. can anyone give me complete info about mutual funds, the fund types; their risk factors, their gains and factors on which they depend upon & other info. i'm in india. thnks for yuur suggestions

Best Answer

Okay, so you've settled on a Mutual Fund (MF). What sets this one apart from all the others? Did it beat the Dow last year? No. If it can't beat the index it tracks, does that make it a "good" fund? No. Let?s look at Investment Company of America (ICA), owned and operated by American Funds (AF). AF is an awesome fund company for a couple of reasons. There are several advantages and disadvantages: 1.AF is a private company which means they only answer to their MF holders. Fidelity is a good company also, but they are owned by stock holders. In the long run the company that only answers to you, the MF holder, is going to look out for your best interests. 2.AF also has some of the lowest annual fees to maintain an account of any MF company. All that being said, depending on your situation ICA may or may not be good for you. You need a competent advisor to help you with that. 3.I would be cautious with ICA as it is one of the largest MF in the world. They may seem like a good thing but it actually can be bad. It means it has much less flexibility to move its money around when conditions warrant it. 4.As far as EJ goes, they hire people on average who have very little experience in the industry, so at a minimum make sure your rep has a lot of experience and didn't just start last month at this. They also have agreements with companies like American Funds where their reps get a bigger commission to them then they do with other products. The concern being your advice from EJ might be tainted by the reps desire to get more commission. You need to work with an independent rep to assist you with you decisions; one who will give you all the information and doesn't have a hidden agenda. Now let's look at MF's, in general, or the decision to use one at all. If you invest in a MF, you have turned that responsibility over to someone else. To me, they are mostly the same, in general, in terms of results. Fewer than 10% can beat the Dow or other index it follows because of their fees. Why would you pay someone you don't know, whom will almost certainly underperform the market, an annual fee of 2.5% to do something you can do yourself, and do it better by buying an ETF, without any input from you after the initial purchase? An ETF is a publicly traded ?Exchange Traded Fund, that trades just like a stock). Just buy the Diamonds (the DJIA ETF) if you want to let it ride on the Dow, or the Spyders (SPY - the S&P 500 ETF), or the Nasdaq (QQQQ), or diversify across the entire market by buying all three. The ETF's trade just like a stock or MF. If you want to diversify, and you want to Buy and Hold, buy an ETF. A MF is always "in" the market, so you are at the mercy of the ups and downs of the Dow. You are unable to manage your risk with a MF, so you can't put a Protective Stop on a MF, at say 10%, to lock in your profits when the market goes down. You don't have a clue what's going to happen. That is not my idea of investing. Actually, if done properly, it is more work to investigate all of the MF's and their advisors and their traders and their fees and their methods, than it is to investigate all the similar applicable info about stocks. To me, it's more like a conscious choice to be ignorant, to simply and blindly turn your money over to a stranger because they are "listed," like you do at a bank. Stocks are "listed," as are commodities and ETF's and everything else. With a mutual fund, you've just added a whole new set of unknowns to the equation. The best you can do in any investment is try to increase your odds of success and reduce your risk. You can do these things yourself, but not in a mutual fund. MF's are so 20th Century. Relics of the past. Unneccessary. Buy an ETF. Or sell an ETF short and bet on the downside. There are two sides to every market, not just the upside.

Need to know information on investing in mutual funds-the pro's and con's of mutual fund investing

Best Answer

Skip books, they can become outdated fast . . . I suggest yahoo's finance section with the investing education and mutual fund info , Scroll 1/2 the way down and on the left http://finance.yahoo.com/