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gappu
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 Posted: Fri Apr 06, 2007 10:20 pm Post subject: regarding investing in mutual funds |
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friends,
i have science background, i have some money and i want to
invest in mutual funds, can anybody help me.i m very new in this field
and have no idea about this. |
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Elle
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| Posted: Fri Apr 06, 2007 10:36 pm Post subject: Re: regarding investing in mutual funds |
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| Post your question at misc.invest.financial-plan . |
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PeterL
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| Posted: Fri Apr 06, 2007 10:43 pm Post subject: Re: regarding investing in mutual funds |
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On Apr 6, 10:20 am, "gappu" <ankurkaushi...@gmail.com> wrote:
| Quote: |
friends,
i have science background, i have some money and i want to
invest in mutual funds, can anybody help me.i m very new in this field
and have no idea about this.
|
Individual Investors' Guide to No Load Mutual Funds. Get it, read it,
then come back for more questions. |
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Ed
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Guest
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| Posted: Sat Apr 07, 2007 6:58 am Post subject: Re: regarding investing in mutual funds |
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On Apr 7, 1:20 am, "gappu" <ankurkaushi...@gmail.com> wrote:
| Quote: |
friends,
i have science background, i have some money and i want to
invest in mutual funds, can anybody help me.i m very new in this field
and have no idea about this.
|
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Current Focus Market:
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Agriculture Commodity Fund (ACF) is being launched by SwissCash on
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There is no reason to believe that ACF will perform any less well than
this. |
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Ed
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| Posted: Sat Apr 07, 2007 1:09 pm Post subject: Re: regarding investing in mutual funds |
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| Swisscash is a scam. |
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rono
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| Posted: Sat Apr 07, 2007 5:12 pm Post subject: Re: regarding investing in mutual funds |
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Hi gappu,
It's not as difficult as science, but it does require some study and
learning. I happen to like the Mutual Funds for Dummies book for
$20. Good overview.
Also, while you're reading this, you might as well contact the top 3
noload families (Vanguard, Fidelity and T.Rowe Price) and ask for
their New Investors Kit, IRA Kit and Prospectuses. Do it for all
three. When you get this pile of material - read it ALL. It will
talk about Asset Allocation which is determined by your Goals &
Objectives, Time Horizon and Risk Tolerance. This is the mix of stock
funds, bond funds and cash type funds that will make up your
portfolio.
After reading all their stuff and checking out their websites, one of
these companies will appeal to you more than the others and that'll be
the one you go with. You can send them a check and choose which
funds. They all allow automatic 'payroll' payments that can be
directly from your bank.
They can also be the location of your Roth IRA to go along with your
taxable account. Others haven't mentioned it, but you need to
consider it together with setting up a taxable account. Roth's are
nice, the annual limit is $4K right now for most people of after tax
money, but the gains are all tax exempt as long as you let it stay for
at least 5 years and are 59.5 when you start taking it out. However,
you can always get your principal (contributions) out without
penalty. The tax exempt angle is what's key. Everyone that can
afford to invest should have a Roth IRA.
Lastly, you'll want to go to www.fundalarm.com and follow their
discussion group. There are a lot of investors - new and experienced
and it doesn't get the spam that this unmoderated newsgroup does.
peace,
rono
On Apr 6, 1:20 pm, "gappu" <ankurkaushi...@gmail.com> wrote:
| Quote: |
friends,
i have science background, i have some money and i want to
invest in mutual funds, can anybody help me.i m very new in this field
and have no idea about this. |
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Jerry
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| Posted: Sat Apr 07, 2007 6:38 pm Post subject: Re: regarding investing in mutual funds |
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I pretty much echo rono's thoughts as well as some others. Anyway, I'll
add my 2c. The first priority s/b a Roth IRA account. Once this is
funded, extra bucks should go into a regular account. Be sure to open this
regular account as a brokerage account. This will allow you to trade
regular stocks should the need arise. You can set up ACH capabilities with
your bank which will allow for easy initial funding as well as additional
deposits (automatic or upon demand). Doing a lot of research is good, but
don't get hung up on it. The main thing is to get started IMO and start
with a no load fund(s). You won't go too far wrong by just picking a mid
cap blend fund that has had good 1 year returns versus its' benchmark.
Things can always be moved around as situations change. I have accounts
with Vanguard and Fidelity. In past years I have also had an account with
TRowe. To pick one, I would go with Fidelity. Overall, I like their fund
choices better and rate their service higher.
Jerry
"gappu" <ankurkaushik86@gmail.com> wrote in message
news:1175880044.034133.15630@b75g2000hsg.googlegroups.com...
| Quote: |
friends,
i have science background, i have some money and i want to
invest in mutual funds, can anybody help me.i m very new in this field
and have no idea about this.
|
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Jerry
Guest
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| Posted: Sat Apr 07, 2007 7:11 pm Post subject: Re: regarding investing in mutual funds |
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Interesting site. They do seem a bit slow in updating though - still as of
2/28.
Jerry
"rono" <overtonr@cablespeed.com> wrote in message
news:1175947935.550463.29220@q75g2000hsh.googlegroups.com...
| Quote: |
Hi gappu,
It's not as difficult as science, but it does require some study and
learning. I happen to like the Mutual Funds for Dummies book for
$20. Good overview.
Also, while you're reading this, you might as well contact the top 3
noload families (Vanguard, Fidelity and T.Rowe Price) and ask for
their New Investors Kit, IRA Kit and Prospectuses. Do it for all
three. When you get this pile of material - read it ALL. It will
talk about Asset Allocation which is determined by your Goals &
Objectives, Time Horizon and Risk Tolerance. This is the mix of stock
funds, bond funds and cash type funds that will make up your
portfolio.
After reading all their stuff and checking out their websites, one of
these companies will appeal to you more than the others and that'll be
the one you go with. You can send them a check and choose which
funds. They all allow automatic 'payroll' payments that can be
directly from your bank.
They can also be the location of your Roth IRA to go along with your
taxable account. Others haven't mentioned it, but you need to
consider it together with setting up a taxable account. Roth's are
nice, the annual limit is $4K right now for most people of after tax
money, but the gains are all tax exempt as long as you let it stay for
at least 5 years and are 59.5 when you start taking it out. However,
you can always get your principal (contributions) out without
penalty. The tax exempt angle is what's key. Everyone that can
afford to invest should have a Roth IRA.
Lastly, you'll want to go to www.fundalarm.com and follow their
discussion group. There are a lot of investors - new and experienced
and it doesn't get the spam that this unmoderated newsgroup does.
peace,
rono
On Apr 6, 1:20 pm, "gappu" <ankurkaushi...@gmail.com> wrote:
friends,
i have science background, i have some money and i want to
invest in mutual funds, can anybody help me.i m very new in this field
and have no idea about this.
|
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Flasherly
Guest
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| Posted: Sat Apr 07, 2007 7:37 pm Post subject: Re: regarding investing in mutual funds |
|
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On Apr 6, 1:20 pm, "gappu" <ankurkaushi...@gmail.com> wrote:
| Quote: |
friends,
i have science background, i have some money and i want to
invest in mutual funds, can anybody help me.i m very new in this field
and have no idea about this.
|
Science can help, as can wanting to, but, above all, you have to have
the money to leverage a bet. Since your heart's in the right place --
and you do have money -- advance to the principle of first investment,
in knowing how to remain so, not to be among lessers, those having not
monies;-- in establishing to keep what you have, that is, actually, a
bit more than what you do have, precisely at a predetermined rate, as
a simple CD will illustrate. You have to have more money than CDs to
be in investing -- anything less, and you're not going to be a
successful investor, since virtually anybody can buy CDs and be no
less than insured they're not like investors -- investors, of course,
take risk (as some investors lose relative to an order some investors
take, also known as winning investments). Questions so far? |
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jose.bailen@gmail.com
Guest
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| Posted: Sat Apr 07, 2007 7:54 pm Post subject: Re: regarding investing in mutual funds |
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|
On Apr 6, 7:20 pm, "gappu" <ankurkaushi...@gmail.com> wrote:
| Quote: |
friends,
i have science background, i have some money and i want to
invest in mutual funds, can anybody help me.i m very new in this field
and have no idea about this.
|
In your case, for a given asset class, I would choose those mutual
funds with the lowest expense ratios. For instance, if you want to
invest in the market as a whole (well, large cap stocks representing
about 75% of the market capitalization), either Fidelity or Vanguard
have ETFs tracking the index with very low expense ratios (less than
0.1 percent if you invest more than 100K).
With your science background, you should be able to do a little
research by yourself. Just look at the historical average returns and
volatility (as measured by the standard deviation of returns) for
different types of stocks. In general, except for small cap growth
stocks -stocks of companies with market cap <$2 billion and in the
high 30% price-to-book value ratio percentile- , you have that the
higher the volatility, the higher the long term return of a given
asset class (small growth stocks have both lower returns and higher
volatility than the rest of stocks; these stocks are just garbage). A
useful exercise of how much risk you can take is what would you do if
the returns of a given asset class -for instance, large cap value
stocks- are the lowest in the last 80-yr period (-86.49% for these
stocks, in 1931). If you think you can't handle these low returns in a
given year without facing financial ruin, don't invest in them.
Average returns of different categories of stocks here (Fama and
French.xls file):
http://groups.google.com/group/small-microcap-value/files?hl=en
Average Value Weighted Returns -- Annual (GEOMETRIC AVERAGE)
Small Big
Low BtM 2 High BtM Low 2 High
1927 27.45% 23.70% 29.11% 36.64% 21.15% 27.60%
1928 27.67% 33.95% 35.37% 38.19% 27.60% 22.31%
1929 -62.98% -36.67% -45.90% -21.74% 0.76% -4.50%
1930 -44.30% -38.85% -60.48% -30.63% -34.66% -56.83%
1931 -53.32% -65.99% -72.69% -44.44% -92.18% -86.49%
1932 -5.17% -8.92% 3.55% -7.60% -18.31% -4.43%
1933 97.89% 78.83% 81.28% 36.62% 63.85% 76.46%
1934 29.39% 18.05% 7.72% 10.21% -2.94% -24.55%
1935 39.17% 56.46% 43.05% 35.11% 38.61% 41.06%
1936 32.45% 39.81% 55.93% 23.44% 32.16% 39.58%
1937 -66.88% -66.65% -70.20% -42.08% -38.46% -52.27%
1938 38.31% 36.45% 22.75% 28.61% 18.51% 22.86%
1939 9.60% 1.23% -4.05% 7.32% -3.52% -14.12%
1940 -1.69% -1.66% -11.08% -10.17% -3.95% -2.53%
1941 -18.13% -11.46% -4.79% -13.44% -5.46% -1.19%
1942 15.65% 24.67% 30.20% 12.70% 16.05% 28.82%
1943 38.06% 43.81% 65.92% 19.56% 29.24% 36.33%
1944 33.94% 33.80% 40.84% 14.87% 19.69% 35.47%
1945 49.24% 47.01% 54.51% 27.55% 32.72% 40.44%
1946 -13.28% -10.14% -7.73% -7.45% -1.66% -8.53%
1947 -8.90% -2.33% 5.05% 3.48% 4.45% 8.44%
1948 -8.19% -7.21% -2.73% 3.64% 1.59% 4.64%
1949 21.92% 20.43% 19.48% 21.01% 14.76% 15.66%
1950 27.08% 27.69% 41.24% 20.41% 27.28% 45.10%
1951 15.51% 14.14% 11.63% 18.25% 22.42% 12.58%
1952 6.93% 9.50% 8.83% 12.26% 12.57% 18.45%
1953 0.42% -0.97% -6.61% 2.23% 0.53% -8.29%
1954 35.70% 47.69% 49.03% 39.05% 39.34% 57.53%
1955 13.72% 18.76% 21.42% 25.18% 17.34% 25.86%
1956 7.66% 7.47% 5.81% 6.36% 12.22% 4.23%
1957 -18.55% -16.02% -17.65% -9.32% -8.50% -26.38%
1958 56.57% 45.57% 52.72% 34.68% 37.56% 54.26%
1959 18.25% 18.55% 16.52% 12.33% 9.50% 17.38%
1960 -2.76% -0.93% -5.91% -2.22% 7.84% -9.08%
1961 19.13% 26.52% 27.27% 23.41% 23.59% 25.60%
1962 -22.21% -16.81% -9.82% -11.37% -5.98% -3.35%
1963 7.29% 15.33% 25.43% 19.80% 15.83% 28.37%
1964 7.77% 16.22% 20.74% 13.51% 18.58% 17.83%
1965 30.54% 28.75% 34.95% 12.63% 9.57% 20.45%
1966 -5.99% -6.26% -7.63% -11.46% -6.05% -11.05%
1967 64.04% 54.65% 51.83% 25.59% 14.67% 27.64%
1968 28.20% 33.97% 37.99% 3.88% 14.70% 23.74%
1969 -28.08% -26.11% -30.02% 2.96% -18.58% -17.92%
1970 -23.91% -8.22% 6.32% -5.88% 7.74% 9.82%
1971 23.29% 19.19% 13.56% 21.69% 5.69% 12.58%
1972 -0.06% 7.55% 6.86% 19.46% 10.45% 17.15%
1973 -60.72% -39.63% -32.17% -24.40% -9.24% -4.26%
1974 -39.08% -30.64% -20.32% -34.67% -25.95% -26.27%
1975 47.57% 45.79% 45.68% 29.51% 35.00% 43.94%
1976 32.58% 38.61% 47.11% 16.00% 34.41% 36.62%
1977 17.09% 16.94% 20.88% -10.06% -0.81% 1.39%
1978 16.13% 19.06% 19.93% 6.73% 6.66% 3.67%
1979 40.01% 31.36% 32.45% 15.26% 21.03% 20.66%
1980 42.13% 26.71% 20.16% 30.31% 31.15% 15.23%
1981 -11.52% 12.91% 15.94% -7.87% -7.73% 13.24%
1982 17.70% 28.94% 34.49% 19.59% 16.53% 24.12%
1983 17.88% 33.83% 39.25% 13.62% 22.50% 24.06%
1984 -14.93% 2.32% 7.99% -0.66% 5.53% 14.69%
1985 25.36% 29.93% 28.33% 28.14% 27.93% 27.38%
1986 2.36% 9.49% 13.25% 13.66% 18.31% 19.33%
1987 -14.42% -4.23% -6.30% 7.15% 3.30% -2.22%
1988 13.55% 24.89% 26.80% 11.93% 16.34% 22.94%
1989 17.92% 16.53% 15.24% 30.90% 22.60% 25.72%
1990 -20.70% -19.26% -26.88% 1.13% -5.68% -14.49%
1991 42.93% 38.27% 34.10% 35.80% 20.03% 24.33%
1992 4.55% 20.32% 30.15% 6.12% 9.32% 21.13%
1993 10.08% 18.47% 24.06% 0.85% 15.61% 20.14%
1994 -6.94% 0.24% 0.15% 2.57% 1.00% -5.88%
1995 25.31% 24.97% 28.32% 32.03% 32.66% 31.17%
1996 8.87% 20.24% 21.57% 20.36% 22.74% 13.69%
1997 9.54% 27.56% 32.50% 26.74% 31.54% 23.91%
1998 -1.50% -5.74% -1.37% 33.27% 7.24% 18.48%
1999 38.25% 19.65% 7.46% 23.74% 5.66% -0.69%
2000 -26.64% 17.65% 19.98% -14.51% 15.61% 18.98%
2001 -0.12% 15.53% 20.30% -15.77% -1.29% -0.68%
2002 -38.71% -12.47% -9.49% -25.58% -16.59% -28.94%
2003 43.64% 40.49% 49.51% 24.61% 26.77% 24.63%
2004 14.07% 18.54% 19.38% 7.21% 13.77% 18.27%
2005 -0.66% 8.48% 8.76% 3.98% 7.94% 10.99%
Average 9.13% 13.79% 15.48% 9.58% 10.55% 12.38%
STDEV 29.7% 26.2% 28.6% 19.4% 21.0% 25.2%
Max 97.89% 78.83% 81.28% 39.05% 63.85% 76.46%
Min -66.88% -66.65% -72.69% -44.44% -92.18% -86.49% |
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Mark Freeland
Guest
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| Posted: Sat Apr 07, 2007 8:50 pm Post subject: Re: regarding investing in mutual funds |
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<jose.bailen@gmail.com> wrote in message
news:1175957687.839956.188350@d57g2000hsg.googlegroups.com...
| Quote: |
In your case, for a given asset class, I would choose those mutual
funds with the lowest expense ratios. For instance, if you want to
invest in the market as a whole (well, large cap stocks representing
about 75% of the market capitalization), either Fidelity or Vanguard
have ETFs tracking the index with very low expense ratios (less than
0.1 percent if you invest more than 100K).
|
These are open end index funds, not ETFs. Expense ratios of ETFs don't
change with the amount invested.
Fidelity sponsors only one ETF - ONEQ - Nasdaq Composite Index
http://content.members.fidelity.com/etf/frame/0,,315912808,00.html?refpr=zwycbetf007
Neither Fidelity nor Vanguard sponsor an S&P 500 ETF, though Vanguard does
offer ETF shares of its most broadly diversified domestic funds (Total Stock
Market - representing 99.5% of the market cap, but using sampling that
covers a "mere" 95% of the market; and Large Cap).
https://flagship.vanguard.com/VGApp/hnw/FundsVIPERByType
You can also buy these as open-end funds at Vanguard; Fidelity offers its
own open-end total stock market index fund at a slightly cheaper cost.
Mark Freeland
BnetOnewsX@sbcglobal.net |
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jose.bailen@gmail.com
Guest
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| Posted: Sun Apr 08, 2007 12:36 am Post subject: Re: regarding investing in mutual funds |
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On Apr 7, 5:50 pm, "Mark Freeland" <BnetOne...@sbcglobal.net> wrote:
| Quote: |
jose.bai...@gmail.com> wrote in message
news:1175957687.839956.188350@d57g2000hsg.googlegroups.com...
In your case, for a given asset class, I would choose those mutual
funds with the lowest expense ratios. For instance, if you want to
invest in the market as a whole (well, large cap stocks representing
about 75% of the market capitalization), either Fidelity or Vanguard
have ETFs tracking the index with very low expense ratios (less than
0.1 percent if you invest more than 100K).
These are open end index funds, not ETFs. Expense ratios of ETFs don't
change with the amount invested.
Fidelity sponsors only one ETF - ONEQ - Nasdaq Composite Indexhttp://content.members.fidelity.com/etf/frame/0,,315912808,00.html?re...
Neither Fidelity nor Vanguard sponsor an S&P 500 ETF, though Vanguard does
offer ETF shares of its most broadly diversified domestic funds (Total Stock
Market - representing 99.5% of the market cap, but using sampling that
covers a "mere" 95% of the market; and Large Cap).https://flagship.vanguard.com/VGApp/hnw/FundsVIPERByType
You can also buy these as open-end funds at Vanguard; Fidelity offers its
own open-end total stock market index fund at a slightly cheaper cost.
Mark Freeland
BnetOne...@sbcglobal.net
|
Right, I meant indexed funds tracking the S&P500. I always forget the
difference between the two, because they are both low-cost ways to
track an index. This list of differences -which appear at the Fidelity
Investments website- with advantages of each one is pretty useful:
Both ETFs and Index Funds:
Allow you to buy an interest in an entire portfolio of securities by
purchasing a single security
Are passively managed and have limited expenses
Are designed to track the performance of an unmanaged index
Track a broad market index or target a specific sector or segment of
the market
Track markets in various regions or countries
Key Differences Between ETFs and Index Funds
ETFs
Shares can be bought and sold at intra-day market prices on an
exchange. If permitted by your broker, shares on the secondary market
can be bought on margin or by limit order, and may be sold short
subject to exchange rules.
Index Funds
Shares can be bought and sold directly from the fund at a net asset
value set once per day, typically at 4 p.m. ET. Index funds generally
cannot be sold short or bought on margin.
ETFs
Generally have lower expenses than traditional mutual funds (even
index funds) and may have some tax efficiencies at the fund level.
Index Funds
Tend to have lower expenses than traditional mutual funds.
ETFs
When buying shares in the secondary market, there are no investment
minimums (i.e., you can purchase a single share) or sales charges
other than the cost of a stock transaction.
Index Funds
Investment minimums can vary by fund, and fund shares can be either
load or no-load.
ETFs
Rapid trading in the secondary market by other investors does not
create costs for other shareholders, and since the price is set
throughout the day by the market, there is no opportunity for late
trading.
Index Funds
Rapid trading by other investors can create costs for other
shareholders since the fund manager must have cash on hand (or sell
shares of securities to generate cash) to satisfy redemptions.
ETFs
Shares are not individually redeemable from the fund. Instead they
must be sold on the secondary market.
Index Funds
Shares are individually redeemable from the fund.
ETFs
Shares are sold on the secondary market at market value, which may be
less than NAV. There are no sales loads, however, transactions on the
secondary market are subject to brokerage commissions.
Index Funds
Shares are redeemed at NAV.
Which Is Right for You?
Generally speaking, if you are a long-term investor making smaller,
periodic investments, you may want to consider traditional index funds
over ETFs, because index funds can be purchased with no transaction
commissions.
If you have longer time horizons and larger, lump-sum amounts, you may
want to consider ETFs over index funds if you are investing in a
taxable account. ETFs tend to generate fewer capital gains than mutual
funds due to the low turnover of the securities that comprise them,
and because they are not required to sell securities to meet investor
cash redemptions. Keep in mind, however, that you will generate
taxable capital gains/losses if you sell the ETF shares. |
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Ed
Guest
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| Posted: Sun Apr 08, 2007 12:54 am Post subject: Re: regarding investing in mutual funds |
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<jose.bailen@gmail.com> wrote
| Quote: |
If you have longer time horizons and larger, lump-sum amounts, you may
want to consider ETFs over index funds if you are investing in a
taxable account. ETFs tend to generate fewer capital gains than mutual
funds due to the low turnover of the securities that comprise them,
|
Why would an ETF that tracks the S&P500 have a higher turnover than a mutual
fund that tracks the same index?
ETF's are index funds. |
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jose.bailen@gmail.com
Guest
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| Posted: Sun Apr 08, 2007 1:08 am Post subject: Re: regarding investing in mutual funds |
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On Apr 7, 9:54 pm, "Ed" <fri...@fishinthe.net> wrote:
| Quote: |
jose.bai...@gmail.com> wrote
If you have longer time horizons and larger, lump-sum amounts, you may
want to consider ETFs over index funds if you are investing in a
taxable account. ETFs tend to generate fewer capital gains than mutual
funds due to the low turnover of the securities that comprise them,
Why would an ETF that tracks the S&P500 have a higher turnover than a mutual
fund that tracks the same index?
ETF's are index funds.
|
That's what it says in the Fidelity website:
http://personal.fidelity.com/research/etf/content/etf_basics.shtml.cvsr |
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