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Mutualfund managers use fake fund names to part you from your money such that you cannot judge what a fund does by its name. Many funds have names that are outright misleading or even deceptive. In the late 1990’s, for instance, during the technology stock bubble, some portfolio managers took advantage of public’s desire to chase the latest fad by slapping “internet” in front of their fund names.
The chances of that happening now are possibly lower. As of July 2002, the SEC requires funds to have at least 80% of their assets in securities that their fund name implies, up from 65% previously. This new rule is forcing funds that called themselves something like the America’s Government Fund to either dispose of East Asian government debt if it exceeded 20% of fund assets, or to change the fund’s name.
Likewise for funds that call themselves an equity income fund but have 25% of assets in stocks that paid no dividends. More than five hundred funds have had to change their names because they failed the 80% rule. Invesco’s Blue Chip Growth fund, for example, is now called just growth fund, since 60% of its holdings are in technology stocks, and many of those can hardly be called blue chips these days.
The 80% rule still allows mutual funds to invest in just about anything up to 20% of holdings. Why don’t you just avoid the entire problem by buying shares of an indexed mutualfund when you only have a selection of mutual funds to select? For this reason I strongly recommend that if you can only buy mutual funds, as in the case of the 401(k), then restrict your purchases to indexed funds such as the Vanguard 500 (VFINX). The best you can do is to learn to select individual stocks in your Roth IRA or individual account.
Creating Wealth #24 – The Three Dimensions of Real Estate Investing™ Unlike stocks, bonds, mutual funds or commodities such as precious metals like gold and silver – real estate is a multi-dimensional asset class. The multi-dimensional nature of income property makes it extremely profitable in changing ways based on varying market conditions. This is a wonderful thing because investors can profit even seemingly “bad” markets. For example, when financing becomes expensive (low housing affordability rates) or difficult to qualify for (low capital liquidity) it can create excellent opportunities to increase rents. When mortgage rates are low and qualifying is easy it can spur terrific appreciation. You can win either way so long as you adapt your strategy based on economic realities.
This week top 10 investments (Nov. 5th, 2008): 1) www.summitreserve.biz 2) http 3) www.epprofit.com 4) http 5) www.fxspear.com 6) http 7) www.e-cobatage.com http 9) www.fxmajesty.com 10) http SCAM ALERT! www.prolexbiz.com www.stable-funds.com www.fxtradeinc.com Thank you for listening to my radio show every Wednesday. See you next week, don’t forget to subscribe to my channel, thanks.
Daniel Adamson of Blue Investment Management is interviewed on abc’s Money Matters about a new mutual fund called The Blue Fund which invests in socially responsible companies that are net contributors to the Democratic party.
March 5 (Bloomberg) — Bloomberg’s Chris Burns reports on the European Union’s investigation into the market for sovereign credit-default swaps in the wake of the Greek debt crisis.
Learn the facts about an IRA rollover and avoid some common mistakes. There are subtle differences between a rollover IRA and an account that has been funded using a transfer, but the terms are sometimes used interchangeably. If you become confused by the details and make a mistake, the account could lose its tax-free or tax-deferred status. Let me try to help you avoid that.
You as the Middleman
With an IRA rollover, you might think of yourself as the “middleman”, since a check is made out to you and you must find a new custodian within 60 days. Otherwise, you will pay taxes on the fund.
In some cases, your current custodian may be required to withhold at least 20% of the fund for tax purposes. But, if you make a transfer, instead of a rollover IRA transaction, you are not the middle man and you don’t have to worry about taxes.
How to Compare Custodial Companies
If you are about to make an IRA rollover, it’s time to compare custodial companies. They charge different fees and offer different investment options. Sometimes, the fees that they charge can inhibit your ability to grow the account to its full potential.
Limiting your investment options also limits your ability to grow the account. So, when you are thinking about a rollover IRA, you need to do a little “shopping”. Compare the fees that companies charge, as well as the investment choices that they offer.
What Investments Are Allowed
Under the current tax laws, you are allowed to invest in public and private stocks, residential and commercial real estate, bonds, treasury notes and bank certificates of deposit, as well as lesser known vehicles, such as tax liens, judgments, lottery winnings and mortgage notes. Most custodians do not offer all of these options for a rollover IRA. The majority of the accounts are invested in mutualfunds, created by the custodial company.
An IRA rollover is safer and can earn more when it is fully diversified. Many people think of diversification as investing in different areas of the stock market. But, complete diversification includes all of the markets; real estate, stocks and money.
The Numbers Game
There are “numbers” that you need to consider when deciding which markets to invest in and how heavily. Bonds, treasury notes and CDs are considered risk-free investments, because they are guaranteed by the federal government, but a rollover IRA will earn a maximum of 4% on these investments. The inflation rate is expected to exceed 5% per year over the next twenty years. You need to consider that, because it means that your money will have less buying power in twenty years.
If your expenses remain the same and you hope to retire in 20 years, you will need twice the money to cover the same expenses. If your expenses are higher, then of course you will need more. Stock market returns rarely exceed 8%, but returns in the real estate market are unlimited.
If you make the right choices today, an IRA rollover can secure your future and your ability to retire, in style. Good luck!
http 9) www.fxmajesty.com 10) http SCAM ALERT! www.prolexbiz.com www.stable-funds.com www.fxtradeinc.com Thank you for listening to my radio show every Wednesday. See you next week, don’t forget to subscribe to my channel, thanks.
Posted on March 10th, 2010 by kaloptan
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