Posts Tagged ‘Should’

“Mutual Funds: Should You Only Buy Low-Cost?”

May 23rd Dollars and Sense Topic: Mutual Funds: Should You Only Buy Low-Cost? “More Living with Jim Brogan” airs each Sunday on NewsTalk 98.7 FM WOKI from 7 am to 8 am and can be heard throughout the East Tennessee area. Each week during the show, Jim records a “Dollars and Sense” segment which provides listeners with the week’s featured financial tip.

Should Investors Focus on Higher-Dividend-Paying Stocks [FOX 10-03-2011]

The P/E ratio (price-to-earnings ratio) of a stock (also called its ‘P/E’, or simply ‘multiple’) is a measure of the price paid for a share relative to the annual net income or profit earned by the firm per share. The P/E ratio can therefore alternatively be calculated by dividing the company’s market capitalization by its total annual earnings. Unlike the EV/EBITDA multiple which is capital structure-neutral, the price-to-earnings ratio reflects the capital structure of the company in question. The price-to-earnings ratio is a financial ratio used for valuation: a higher P/E ratio means that investors are paying more for each unit of net income, so the stock is more expensive compared to one with a lower P/E ratio. The P/E ratio can be seen as being expressed in years, in the sense that it shows the number of years of earnings which would be required to pay back purchase price, ignoring inflation and time value of money. The P/E ratio also shows current investor demand for a company share. The reciprocal of the P/E ratio is known as the earnings yield. The earnings yield is an estimate of the expected return from holding the stock if we accept certain restrictive assumptions (a discussion of these assumptions can be found here). – Visit: MeTee.com Our channel sponsor. – This channel is like the 5+ year running: www.youtube.com (has been named many different channel names over 5 years), but it’s not and not related. Subscribe for more news. Like/Dislike, Comment, Favorite …

www.MakeMoneyFromScratch.net There are more ways to invest money. It is not just about the stock market and real estate. Although stocks and real estate still might be considered the high reward investments, bank accounts, bonds, certificate of deposits, and mutual funds are much safer and still yield high returns. So the next time you are looking for a great investment opportunity, look outside the box. Find out more by watching the videos… Visit http for more information
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in which mutual fund, i should invest?

Question by thenewone: in which mutual fund, i should invest?
i want to invest in SBI COMMA (OR) MIDCAP FUND

please tell me in these which is the best one.

but, my excutive told me to invest in comma fund.

so i’m in confusion
. please tell me

thank you.

Best answer:

Answer by Kay
Go to Yahoo Finance and type in the mutual fund’s symbol you mentioned above. You can see the chart as well as other pertinent financial information and how each fund has been performing. Is it going up recently or going down significantly? Also find out expense ratio; fund management fee (how much or what % the fund manager charges to unit holders). If the fund management charges too much, profit you make from the fund could be eaten away by these fees. Just remember, they charge even if the fund performs terribly.

Give your answer to this question below!

Why should someone pay for finical advice when the broker is investing their money into mutual funds?

Question by Larry W: Why should someone pay for finical advice when the broker is investing their money into mutual funds?
The broker is paid a commisision. Plus, the broker gets the fee for the advice. I have to pay internal investment management fee inside the mutual fund. It does not appear that the broker is managing the investment.

Best answer:

Answer by Amanda
The advisor helps pick a suitable mutual fund. Believe it or not some 20-somethings think they should invest only in bonds and some middle income 60-somethings think they should only invest in international emerging stocks. People just don’t know.

Add your own answer in the comments!

Where Should you Invest in? Money Yatra: Part 2

CNBC Awaaz programme Money Yatra (Part Two) features Harsh Roongta (CEO of www.apnapaisa.com ) Personal Finance Expert, Prakash Gaba- A committed Professional Technical Analyst and a Trader and Nishu Agarwal. The Show is about how and where to invest your hard earned money in? – Stocks, Insurance, Mutual Funds,etc
Video Rating: 5 / 5

Meet Tomas and Jose Avila, identical twins who each founded an investment club. Their members, Honduran immigrants in New York City, research companies and mutual funds, and decide where, when and whether to invest. Whether their holdings skyrocket or stutter, members of both clubs view every decision as a great lesson in investing wisely.
Video Rating: 5 / 5

Do you believe we should strengthen our financial education at our kids high schools?

Question by St. Jimmy: Do you believe we should strengthen our financial education at our kids high schools?
I am amazed at how many people do not know how the financial world is made. The emerging markets, asset management, commodities, mutual funds, hedge funds, annuities, stocks, bonds and mortgages must be common knowledge for when you’re in high school I believe. That’s a big oversight in our education system. Each student must know how and never expect an “expert” tell you as Financial is history. You have to know for yourself.

This is a capitalist society, which is good, but it also means caring for oneself.

I think we should take as many finance classes as we can, no matter what your line of work and / or your field of study. If you are not good at economics or statistics, more reason to take these classes and paying attention. Having a financial blind spot you will have some unpleasant surprises in the future. Know how to work the financial sector affects you in every way.

I just think if this was taught A LOT more in are High Schools they can learn and prepare for our future by learning how to make money for the long run. It will have a great affect lowering the amount of people who lives under poverty and strengthen our country. If we have kids learn financial education in schools around the country I can see a future where our debt can go away and we can be a stronger country as a whole.

Best answer:

Answer by Zay-el
FINALLY, someone who sees this as a problem! It’s about time the USA got decent financial education, instead of spewing talking points gathered from one pundit after another.

What do you think? Answer below!

What type return should be expected from a managed mutual fund portfolio relative to a comparative index?

Question by David L: What type return should be expected from a managed mutual fund portfolio relative to a comparative index?
Not even sure the question makes sense and have a limited knowledge of how investments work. My quarterly statement from an account with an investment advisor shows my rate of return in a diversified mutual fund portfolio for a 5 year period and it’s always lower than a comparative index. 5 points lower for the current year and less than one for the 5 year period. Net of 12.94 for the 5 years is good but should I be getting better from the advisor? Question may be too vague to answer but wanted thoughts from those more knowledgable on investing. Thank you.

Best answer:

Answer by Oh Boy!
No, I think your questions are right on the money.

Given that you’re paying for management, your adviser and the managers he/she selects should be able to beat the relevant index/benchmark. If they can’t do that, and 5% is a huge underperformance, then why wouldn’t you just put your money into index funds? You know what your performance will be relative to the index (just slightly less, about 0.15% less per year for large-cap domestic like the S&P 500).

Remember that you’re competing with other investors. People think about the amount of money they put away, but I consider it a competition against other investors since that’s who I’ll be competing against for housing, health care, entertainment, travel, nursing care, etc.

What do you think? Answer below!

If our economy is failing should I pull out of my mutal fund?

Question by Future Cat Lady: If our economy is failing should I pull out of my mutal fund?
If this article is true, should I pull my $ 7k (I just started my IRA) out of my Fidelity mutual fund? I would hate to lose every penny and then start out at 0 again. I know that the financial markets always rebound after long periods but what if this recession is as bad as it seems?

http://news.yahoo.com/s/ft/20080219/bs_ft/fto021920081334359078&printer=1;_ylt=AtPG88TvSv_QaGc3.Hiw3S73ULEF

Best answer:

Answer by TeBaN
it’s really up to. if you think your economy has a high chance of recovering.. then think about this matter the second time.. But if you feel it’s hopeless.. then go.. but then if you wanna play safe. then don’t do anything.. hope this helps=)

Know better? Leave your own answer in the comments!

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When Should You Redeem From a Mutual Funds

Advice on Mutual Funds is available freely, and there are many advisors so called intelligent advisor which will keep on telling you, where you should invest. But when it comes to redeeming from the investments, it requires a level of expertise, to redeem your investments at right time. Redeeming means right time to take your money from your investment and it is no longer beneficial to stay invested.

There can be many reasons for redeeming, but here are some basic reasons which you should consider while redeeming your money.

1. Have achieved your investment Objective: Mutual Fund investments are made in a long term horizon. Some of the investment objectives include child education, retirement planning, buying a home etc. If you have achieved, your financial goals through your investments you can redeem your money, and in other case, if you have not achieved your Financial Goals then you should stay invested in these schemes.

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2. Mutual Fund revises its mandates: Mutual Funds have an mandate in their clause, i.e they used to declare about their investment strategies, about how they are going to manage your invested money. If the fund is not receiving its investment objectives, they are used to evaluate these mandates, and tend to revise them by making some changes in these terms. From your perspective, you will have to evaluate whether the mutual fund with a revised mandate merits a place in your portfolio. If it doesn’t, then its time to redeem it.
3. Fund Manger Quits: The intelligent guys who are managing all your invested money are Fund managers. There are many Fund managers who have a fan following. Usually you should invest in a fund depending upon the reputation of Fund house. But if you have invested according to the reputation of Fund manager, and Fund manager decide to move on from that fund in which you have invested, and then it’s the right time for you to redeem from the Fund.
4. Mutual Fund is not performing: If you are not getting ROI on your investment, and its performance is below the other funds of same category, then you should take a call on redeeming your money. But before redeeming from a Fund you should evaluate it over a long period of time. Some time because of the external factors, performance is below par performance, but if you are convinced that it is dud, then it’s the right time to redeem.

Hope these Points will help you in taking a decision while redeeming your investment.

At the outset, it is important to note that the ‘right time to redeem’ does not mean that there is a timing element involved over here. Rather the right time to redeem means when the time is up on your mutual fund investment and it is no longer prudent to hold on to it.

Top 10 Reasons Why You Should Self-Direct Your Retirement Instead Of Investing In Mutual Funds

There are thousands of so called financial advisors that tell you that you should invest in mutual funds, money market accounts, stocks, bonds and life insurance policies and diversify your retirement portfolio.  This is some of the worst financial advice you can get and the general public has been duped by the large investment companies like Fidelity, Charles Schwab, and the large banks for years.  These so called financial advisors that work for these big companies have very limited to no training and are not incentivized in the right ways.  They make so much money off of trading fees and annual fees that you can never get ahead even if they could outpace inflation in the first place with their investments.  Well you do not have to put up with this theft anymore.  There are retirement vehicles and custodians out there just like the Fidelities and Charles Schwab’s that enable you to self direct your retirement into almost any investment options you want and control your own financial future instead of handing it off to one of these so called financial advisors.  What is a self-directed retirement account?  It’s an account just like what you would have in Fidelity or a similar company but you can invest it in pretty much whatever you want instead of being limited to what the Fidelities of the world allow you to invest in, that they make the most fees on. So you can open an IRA, 401k, Roth IRA and HSA (Health Savings Account) that you can actually make decisions with and invest with.   Here are the top 10 reasons you should self direct your own retirement instead of giving it to one of these large companies that basically steal your money in fees.

(1)    Self-directing your retirement account is the only way to protect your own retirement.  If you do not take control of your own retirement investing and educate yourself on alternative investment options you will lose purchasing power and your retirement accounts will probably lose another 30% – 40% like we just saw with some of the major economic problems we are seeing.  Massive inflation is looming so you have to invest in assets that produce a higher return.

(2)    Self-directed custodians typically have fee structures that do not completely deplete your returns like the traditional IRA and retirement companies.  Typically you have much smaller transaction fees, much smaller annual fees and you can find ways to cut down on fees even more as a percentage of your retirement account.  You want to keep the interest and returns you make, not pay them back in fees which can significantly hinder your retirement’s growth.

(3)    You can build your retirement a 1000% faster by self directing your retirement than not.  If you are investing in traditional investments like mutual funds and stocks you are only going to make the long term historical average of those investments at best depending upon the economic stability of the market.  The long term historical averages are close to 8% – 10%.  With inflation historically at 3% – 3.5% and even higher inflation expected that is not a high enough return.  By investing in alternative investment options like real estate you can make 15%+ returns on your money without even using leverage.  You can even leverage real estate (get a loan for real estate) inside your own retirement account increasing your returns to 20% plus.  Now that is power especially when you can do it safely with the right risk mitigation techniques in place.

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(4)    By self directing your own retirement account you can actually actively control your investments.  When investing the traditional way you have absolutely no control and have a significant amount of risk when investing in mutual funds and stocks.  You are at the mercy of what the market does.  When you self direct your own retirement you can control the assets inside your account.  You can structure the investments so that no matter what the market does you are making residual cash flow inside your account so you do not have to worry about market fluctuations.  You also have the power to increase the value of the assets inside our account.  Also, if you buy discounted real estate inside your IRA not only can you then go sell for a huge profit but you are building your retirement account tax free.

(5)    Tax free investing is one of the largest benefits of investing in a self directed IRA.  Can you imagine buying a rental property worth 0,000 for ,000, renting it out for ,000 per month, having all of the income going back to your retirement account tax free and then when you go to sell the property for 0,000 the ,000 in profit is tax free also.  No capital gains taxes and no taxation on the rental income.  This can compound the growth of your retirement accounts at an amazing pace.

(6)    Building an annuity inside your retirement account is crucial to your retirement plan.  For example, if you need ,000 a month to live on during retirement and are able to make a conservative 10% on your money inside your account you need 0,000 in your retirement account in order to retire and NEVER deplete your principal.  If you leverage your investments and make 15% on your money inside your retirement account you only need 0,000 in your retirement accounts.  So unlike what most financial planners will tell you, you don’t need ,000,000 dollars inside your retirement account to retire.  Now keep in mind if your expenses are ,000 per month, you want to be making ,500 per month passively so that you can continue to build your income and protect yourself from the loss of purchasing power due to inflation.

(7)    Current tax planning and saving on current taxes is a huge advantage for self directed investments.  If you invest in an IRA your current contribution limit is ,000 and ,000 for a 401k.  This can bring a big tax advantage because the contribution directly decreases your taxable income dollar for dollar.  If you setup a solo (k) plan or pension plan you can contribute close to 0,000 per year and reduce your taxable income by 0,000!  This is unreal.  You are saving ,000 per year by doing this if you are in a 35% tax bracket.  Tax rates are rising because the government and states are broke so it’s even more crucial to plan for taxes.  You can then go take that 0,000, invest in passive cash flow investment property right and have the income making you 15% plus on your money.  With both combined you just made ,000 (,000 tax savings + ,000 interest) on your 0,000 that year.  Now if that is not going to get you to your goals I don’t know what will.

(8)    Self directed investing increases your education and ability to protect yourself instead of relying on someone else for your retirement.  By self directing your retirement you are now taking control of your own retirement.  With that comes the need for you to educate yourself on additional investment options and the risks and rewards of those options.  This education is going to be key to your future financial success and stability.  The more you educate yourself the more stable you will be because as economic changes happened you will be in a better position to protect yourself and adjust your retirement portfolio according to those changes.

(9)    Additional investment options are needed in order to secure your future.  There are so many investments that produce additional returns.  You can still invest in stocks, bonds, mutual funds like traditional companies allow you to invest in but you can also invest in real estate, promissory notes secured by real estate, tax liens, businesses, syndicated and structured investments and much, much more.  Your options are limitless.

(10)Your piece of mind knowing that you have been able to structure yourself to protect against economic fluctuations is HUGE.  Now you can rest easy knowing that you have educated yourself correctly, have invested in vehicles that can give you higher returns, and have the power to control your own financial destiny is the best benefit you can ask for.  Most people have little to no financial knowledge and that is why most people are broke.  The more you educate yourself the more successful you will be.

There are many companies out there that can help you self direct your retirement account and many companies out there that can help you structure your self-directed IRA into multiple cash flow streams.  Learn from those companies and push yourself to take action on your own financial future instead of relying on so called financial advisors to do it for you, but are failing at an alarming pace.