How Do Mutual Fund Companies Profit? - mutual fund companies
As investment companies can get a return on investment than the industry average? What are their strategies? Did they buy and keep for many years without speculation? Or is this speculation? I have no idea. I thought if I know their strategies may be found on my merit.
Thursday, January 21, 2010
Mutual Fund Companies How Do Mutual Fund Companies Profit?
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Their strategies are described in the brochure. They arent going to explain exactly what it is because you do not want that every copy, especially if it works, is. If everyone copied the strategy would work anyway.
Their strategies are described in the brochure. They arent going to explain exactly what it is because you do not want that every copy, especially if it works, is. If everyone copied the strategy would work anyway.
In another part of your question, in many cases, mutual fund companies profit by charging fees for providing management services to manage your money. Even if the fund loses even more value to the levying of charges for certain assets under management in many cases.
About 70% of mutual funds underperform the market average. Some studies show that percentage is even higher. There are several reasons. One reason is that mutual funds charge a management fee of 1.5% on average. So, what are the market performance, on average, the rate of return for investors, 1.5% less. Another reason is that many fund portfolios are valued at several billion dollars. How would you treat one billion U.S. dollars of investment, and try to beat the market average? Almost impossible. Mutual funds and other institutional investors are the market. We take individual investors, only the crumbs that fall to the ground.
About 70% of mutual funds underperform the market average. Some studies show that percentage is even higher. There are several reasons. One reason is that mutual funds charge a management fee of 1.5% on average. So, what are the market performance, on average, the rate of return for investors, 1.5% less. Another reason is that many fund portfolios are valued at several billion dollars. How would you treat one billion U.S. dollars of investment, and try to beat the market average? Almost impossible. Mutual funds and other institutional investors are the market. We take individual investors, only the crumbs that fall to the ground.
The answer is yes it ....... Seriously ... Each fund has a prospectus that the level of risk, they shall describe. In addition, Morningstar between the deeper levels of measurement time jobs, etc.
There are trading styles, but different. Different types of stocks (value, growth, Large Cap, Mid Cap, Small Cap, International, REITs, ETFs), Penny Stocks, etc
Take your time. Read. Find what suits you best.
BTW: We found the stockpiling adequate distribution "active" is the best answer for us. We have 50% of the ETF, s, 25% in individual stocks and 25% in mutual funds.
generally very good, especially if they are a mix of stocks and bonds as a fund Vanguard
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