Time To Invest In Financial Mutual Funds
July 15, 2008
The stock market has been very scary for a while now but especially today. Friday night Indymac failed and the Feds steeped in to take over. I read people where lined up at the bank to take their money out. But here is the thing how far can all the big banks and financials go down? It might be time to start nibbling at some mutual funds or index funds that invest strictly in the financial sector.
This is a very contrarian play but it might be a good long term investment to pick up some mutual funds specialing in financial stocks. When you think about it all the banks can not go to zero or the United States will be a complete mess and no one will have money. The government is going have to step in and save all the banks. So looking at it this way pretty much all financial stocks are looking like great deals for long term investing. Mutual funds work great for this situation since they invest in lots of financial stocks. Some of the Janus funds that only invest in the financial sector might be a good play right now. It would be to risky to invest in individual bank stocks since you never know which ones will fail. But investing in a lot diversify the risk and should give you some nice long term gains.
Best Fidelity Mutual Funds
May 13, 2008
The best fidelity mutual funds are plentiful. Fidelity is a huge investment company with all kinds of investment products to choose from. Some of the categories you will find the best fidelity mutual funds in are domestic, bond, international, index, sector and many other mutual fund type categories. The reason why you will find many of the best fidelity mutual funds with Fidelity is because they have one of the largest research teams in the industry. Plus they have many highly rated funds by Morningstar.
If your looking for the best fidelity mutual funds you should be checking out the ones that got a four or five star rating from Morningstar. The Fidelity growth discovery fund symbol FDSVX is a five star morning star rating and is a fidelity fund pick. The minimum investment is $2,500 and it has done really well over the last 5 years. The return over the last 5 years has been 11.85% which out performed the Russell 3000 Growth by about 2%. The basic strategy is to invest in above average growth stocks.
The Fidelity International Discovery Fund is another of the best mutual funds fidelity has if your looking to get international diversification. Morning Star rating is 5 stars and the five year average annual return is over 22% which is really amazing. For a well balanced portfolio you want to have some money invested in the best fidelity international mutual funds and the Discovery Funds seems like a good match for that.
The Best Mutual Funds are Very Diversified
February 5, 2008
If your interested in buying mutual funds, one of the reasons most people buy them is because they can help diversify your portfolio. What is diversification and why is it good? Well it basically means your investing in many different industries and sectors. Any of the best mutual funds you buy will be spreading their money into small caps, large caps, Internet, industrial, and all kinds of different types of stocks. Having your funds diversified is good since all your eggs are not in one basket. Say you had all your money on line invested in Internet stocks back 2000. You would of lost tons and tons of money. But if you had invested in all kinds of different stock industries the damage to your portfolio would have been less significant.
Generally just buying one of the best mutual funds will help you be diversified but you need to keep in my some funds only invest in certain sectors. While sector funds will be a good way to play a lot of different stocks in say the banking or oil sectors they won’t give you a total diversification of being invested in all the sectors. Some of the best sector mutual funds can perform really good if things are on the up and up in that particular industry but you can really get hurt with them if you don’t buy into more generalized mutual funds to protect yourself.
Buying one of the best mutual funds that invests in all industries and is a great way to protect your self. Think of it this way; usually when one sector or industry is going up another one will be going down. By investing in all of them and being diversified you will be able to ride out the bumps and get a more overall average market return. Plus being invested in some of the best mutual funds will really help too.
Basics of Mutual Funds
January 30, 2008
Ok if you want to find the best mutual funds you are going need to understand a few basic principles of how mutual funds works. This post will go over the very basics so if you already have a good understanding how things work I would recommend reading some of the other more involved posts.
What is a mutual fund? To make things easy, think of it as a pool of investors who bring all their money together. This money is then invested in stocks or bonds by professional money managers. Right there is the ultra simple definition of what a mutual fund is. But if you want to find the best mutual funds you have to understand more than that.
Mutual funds allow a small time investor to have their money professionally managed even thought they would never be able to have this happen with just the small amount of money they have. Economy of scale comes into play here; because so many investors combine their money in a mutual fund they get some advantages. It would be pretty tough to find a professional money manager to take the time to invest a little amount like $5,000 but when you combine hundreds of investors they can all benefit.
When you invest in a mutual fund you will buy shares in it just like you would an individual stock. But unlike stocks; they do not trade through out the day. What usually happens is that the NAV which is the net asset value is calculated each day and that is the price that you either buy or share you best mutual fund shares at. There are companies out there who’s main objective is just to figure out what each mutual fund is worth each day. If the stocks or bonds your mutual fund holds, are making money and going up in price than your shares in the best mutual funds will be going up in price as well. Of course if the fund your invested in is not doing good then your shares will be dropping in price as well.
I hope this overview will help you understand the best mutual funds a bit better.
