Learn How to Invest in Mutual Funds

If you are unwilling to take much of a risk, you are likely to stick with investing in fixed funds which won't leave you in a position where you are likely to lose everything, but they are also unlikely to put you in a position where your savings will multiply low risk often equals low growth . Over Confidence - more than one employee told me that they are investing their money in only one or two funds. Consider Lifestyle Funds - lifestyle funds are an excellent option for investors who feel that they don't know enough to invest for themselves or that don't want to deal with the hassle. Stay Out of the Money Market Fund or Stable Value Funds - such funds are great if you are building an emergency cash reserve or saving for your summer vacation, but if your investment time horizon is long, putting your money in such vehicles is a poor decision. When the price is below the average you use, be in the Money Market, or stable value option that does not lose money! Move your investments to the stable option as soon as the indexes and funds move below the average you use.
Mutual Funds are really great investment options designed to reduce risk. In general, you can further divide this form of investing into the following categories: - money market funds are considered very low risk and have very low return. Sometimes, the return on these investments is less than inflation - bond funds invest in government loans, both federal and local. They are low to moderate risk investments and are very sensitive to interest rate changes - balanced funds mix stocks and bonds to reduce the investment risk of stocks and to benefit from the certainty of bonds - stock index funds consist of stocks of companies which are found in market indexes and who generally follow the stock market. As you near retirement, you might want to switch your investments to more conservative funds to preserve their value. Target-date funds simplify long-term investing.
Mutual Fund Companies - These companies allow you to open up a Roth IRA and then choose which of their mutual funds you would like to invest your money in. If you are diligent in keeping up with how the funds are performing, you can switch your money from one fund to another easily. MSN Money's Start Investing message board from participants in plans that offer C shares of mediocre mutual funds. All the matters are the long term trends, and in the long run stable value funds barely keep up with inflation. Unless you are talking about a lifestyle fund, or a couple of very broad based index funds, you are probably not going to get the diversification you need from such a small number of funds. Generally speaking, if you are given the choice between two funds that cover the same asset class, you probably want to pick the one with the lower cost. Select funds that cover different asset classes. Once you have discovered which index your fund tends to follow it will be obvious on the charts then pick one or two funds that follow the $RUT, one or two that follow the $MID, one or two that follow the EFA foreign funds are usually easy to spot by their names , and finally one or two that follow the NASDAQ.
Watch the indexes, and watch your funds if they have symbols. Fixed Funds Fixed Funds, sometimes called Guaranteed Funds, are known for steady, predictable growth in the long term. They carry Guaranteed Interest Contracts underwritten by insurance companies, and because of that fact are commonly considered very low risk funds. This includes the additional protection of the funds from garnishment or attachment by creditors or assigned to anyone else, except in the case of domestic relations court cases dealing with divorce decree or child support orders QDROs; i e , qualified domestic relations orders . While it doesn't help the employee's current tax situation, funds that were contributed on an after-tax basis may be easier to withdraw since they are not subject to the strict IRS rules which apply to pre-tax contributions. It does not include any matching funds that the employer might graciously throw in. Because every penny taken in the form of expenses is at least a nickel you won't have in retirement, you want low-cost funds. If these conditions are met, the funds can be withdrawn and used for one of the following five purposes.

Mutual Funds - The Down-to-Earth Basics

Mutual funds are designed for average investors who wants to invest but do not want to select and manage investments like stocks and bonds on their own. In other words, they are the investment of choice for most people.
When you invest in them, professional money managers deal with all the details. You select the fund(s) you want to invest in and they do the rest for you. The average person can have a diversified and balanced portfolio of securities (investments) by simply owning shares of the appropriate mutual funds.
If you know little about how to invest, you might want to know if mutual funds are good investments. The answer to that question is that the less you know about investing, the more attractive mutual funds are. I'll take that a step further. Most people who invest in stocks and bonds and other investments on their own would be better off just owning mutual fund shares, because few of them are capable of managing a portfolio (list) of investments on their own.
So, getting down-to-earth, you need to know your choices before you rush out and invest in mutual funds. Here they are in a nut shell.
There are 4 basic types of mutual funds based on what they invest in.
MONEY MARKET FUNDS are the safest and they pay interest in the form of dividends. These funds invest in safe short-term IOUs like CDs and U.S. Treasury bills, the safest investment in the world. The value of these funds does not fluctuate.
BOND FUNDS pay higher interest, also in the form of dividends. There is moderate investment risk here, and the value of your investment will fluctuate. These funds invest in bonds.
STOCK FUNDS are the riskiest type of fund, and there are many varieties. This is where investors go for higher returns (profits). The share price (value) can fluctuate significantly, because these funds invest in stocks.
BALANCED FUNDS go by various names. Examples include asset allocation funds, lifecycle funds, and target retirement funds. All of them invest in some combination of the three types of investments mentioned in the above three fund types.
There are 2 basic types of mutual funds based on how you buy them and what it will cost you to buy (or sell) and own them.
LOAD FUNDS are sold to you by someone in the investment business. You pay a commission or sales charge (called a LOAD) to buy, hold or sell these funds. Yearly expenses are also deducted from each fund you own.
NO-LOAD funds you must purchase on your own, traditionally through a mutual fund company directly. For your efforts you avoid a sales charge (load). Yearly fund expenses still apply, but if you know where to shop, they can amount to less than 1% a year.

How Warren Buffet, World's greatest investor escaped biggest stock market crash

How Warren Buffet, World's greatest investor escaped biggest stock market crash: Many decades ago when stock market was booming and a lot of people making fortune from it. The bull so influenced the market that even the dust in the street knew something was happening. Warren's heart melted when his shoe maker called his attention to a scrap of paper which he pulled from his pocket and said, "Mr. Buffet, they said these stocks are bound to pull the strings in the few days and i bet you can make real money if you invest in them immediately" This is when it dawned on Warren that, if stock can be traded in streets by mere novices, then the market is in trouble and headed for a scratch. Warren Buffet did not waste time in off-loading his investment into safe heaven and too too long after this the market caved in.

Warren Buffet's current strategy: Warren Buffet does not only have gumption for forecasting the direction of the stock market, he has also over the years been able to ascertain the direction of the market by his investment decision. In the face of thick economic recession, Warren Buffet strategies were quite unusual, instead of exposing his company's portfolio to more risk, he reverts to his personal portfolio which is 100% into government bond, a portfolio he spends a lot of his personal wealth into buying government securities and this has not in any way been affected by current melt out. We know that government bonds are most secured investment instrument known. Government will always have money to pay back investors.

Why people loose money at the stock market

Why people loose money at the stock market: The first factor is "NO EXIT STRATEGY" The level of your greed determines how much loss a person will incur in the stock market. You can not be greedy and at the same time make money. A greedy man in the stock market is the man who buys a stock for example at $2 and even when the stock appreciates two months later to $4 refuses to sell but wants to sell at $200 within the next 8 months. Eventually such a person ends up losing all. Another factor that can make someone to loose money in the stock market is fear. When you are afraid of losing money in the stock market, you may eventually loose it. It takes a man to first see money with his mind before he can see it with his eyes. You need foresight in the stock market to make money and avoid loss. If you do not see money in the stock market you see loss and what you see is what you get.
In addition to the factors above, one major thing a lot of investors fail to do in stock market is to ascertain the right time to sell. This cause so many investors a lot of losses because they fail to sell at the right time. Another factor is ignorance. Ignorance is a killer and to kill your ignorance about the stock market, you need to educate yourself by attending financial seminars, reading books and other materials about capital market. If you don't want to loose money in 2009, then you must carefully take note of the following when going into any investment. Time to buy, Time to hold and Time to sell. If you discreetly master the three factors above, then you can be sure to avoid any loss. Out of these three the most important is the time to sell. Let me emphasize that if you overlook this, then you may have to overlook your losses as well

De-materialization and Re-materialization in Stock Investment

De-materialization is the conversion of a share certificate from its physical form to electronic form for the same number of holding which credited to your dematerialization account which you opened through a depository participants. De-materialization is a process by which the company takes the physical share certificates of an investor back and an equivalent number of securities are credited in electronic form to the depository. Depository is an organisation where the securities of a shareholder are held in electronic form.

Re-materialization is a process by which a shareholder can get his holding converted back into physical form of share certificate. Benefits of De-materialization to investors: A safe and convenient way to hold securities. The depository system reduces risks involved in holding physical certificates e.g. Loss, theft, mutilation, forgery, etc. It ensures transfer settlement and reduces delay in registration of shares. It ensures faster communication to investors. It ensures faster payment on sales of shares. It provides more acceptability and liquidity of securities.

Investment Club As A Learning Platform

Investment Club As A Learning Platform: An investment club is a group of people with similar interest, they could be friends, families, neighbours or work colleagues; the yard stick must be common investment interest. Investment clubs unlike other kinds of club bring together people who meet regularly to discuss the way and manner their money is being used to buy shares in the stock market or any other investment instrument used by the club. Because of the need to team up with like minded investors, both experts and other people, investment club provides opportunity for club members to learn about investments instruments like the stock market. Members can, through such meetings develop investment skills as club members share experience and learn from each other.
Investment club create an opportunity for people with different knowledge and background in different areas to be able to come together and positively influence investment decision in the club as regards their investments. Experts in different areas can bring ideas together, instead one studying all the area, you find everyone studying different areas and imparting this on the club performance. You can benefit from a wide range of knowledge and opinions. The advantages: Joining an investment club is not usually about making a fortune but instead, learning more about investing in a fun environment. Whether you have bought shares in the past or not, you are bound to discover other people have different and successful ways of investing and knowledge you do not possess.
INVESTMENT CLUB AS A FINANCIAL HOUSE FOR SMALL SAVERS. Club members pool together financial resources or surplus cash from their income to invest in the stock market. Setting up a club is to be able to pool small amounts of cash to invest in shares.

Strategic recovery patterns for investors

Strategic recovery patterns for investors: DON'T START YOUR INVESTMENT CAREER WITH FAILURE: Don't buy stock because you hear that every body is making money in stock market as a result you want to make quick money. That is being pushed by greed and get-rich-quick mindset. FAILURE IS NOT THE END: Even when stock market is experiencing some bearish moments like some stock exchanges the world over. Convert your short term stock to long term investment, in this way, you will recover and make a lot of profit in the long run. YOU CAN BE WEALTHY WITH STOCKS: Buy stocks based on accurate information. Read about stock from conventional newspapers and financial papers. During bearish period, buy a lot of cheap stock for long term. THE ROAD TO WEALTH IN THE STOCK MARKET STARTS WITH RISK: Every investment has some elements of risk. Infact investment is a calculated risk. Study stock market very well, know the fundamentals of the companies you are buyingtheir stocks, convert to long term if bear sets in.