things you need to know about investing - success resources richard tan
Post on 23-Jan-2015
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THINGS YOU NEED TO KNOW ABOUT
INVESTING
RETURNS
Mutual funds are like many other investments
without a guaranteed return: there is always the possibility that the
value of your mutual fund will depreciate.
RETURNS
Unlike fixed-income products, such as
bonds and Treasury bills, mutual funds
experience price fluctuations along with
the stocks that make up the fund.
RETURNS
When deciding on a particular fund to buy, you need to research the risks involved – just because a professional manager is looking after the fund, doesn’t guarantee good performance.
That’s largely dependent on the skill of the Fund
Manager in picking winning investments.
RETURNS
ADVERTISING
The first thing you need to be aware of is to ignore the pretty brochures and attractive advertising.
ADVERTISING
Some funds may be incorrectly labeled and can therefore manipulate prospective investors by using names that “sound nice.
ADVERTISING
Instead of labeling itself a small cap, a fund may be sold as a “growth fund”. Or, the “Zimbabwe High-Tech Fund” could be sold with the title “International High-Tech Fund”.
DIVERSIFICATION
Diversification is touted as one of the advantages of mutual funds but many
fund investors tend to over-diversify.
DIVERSIFICATION
Warren Buffett’s belief is over-diversification can hamper returns as much as a lack of diversification. That’s why he doesn’t invest in mutual funds.
DIVERSIFICATION
It’s also why he prefers to make significant investments in just a handful of companies.
DIVERSIFICATION
The reverse is also true if investors acquire many funds that are highly related and, obviously, don’t get the risk reducing
benefits of diversification. If a fund invests only in a particular industry or region it is still
relatively risky.
FEES
Mutual funds provide investors with professional management, but by allowing you to take a hands-off approach to investing comes at a cost. You pay operating fees charged as an annual percentage – usually ranging from 1-3%.
You’ll also pay fees for purchasing or selling the
funds. These are fees you have to pay regardless of
the performance of the fund. This means that
even if your fund doesn’t make any money, you’ll
still have to pay the fees.
FEES
Success Resources Pte LtdMain Office: 10/11 Pahang Street, Singapore
198611Toll Free: 1800 7822 377
Direct: +65 6299 4677Fax: +65 6295 2441
Email: info.sg@srpl.netWebsite: http://www.srpl.net
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