Growth Of Mutual Funds
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Cathy Said:
What do you think of Growth Mutual Funds?We Answered:
Well, first thing. Mutual funds suck(Sucks may be a bit harsh. Let's just say they're not as good as other instruments). (Search some of the resolved questions where I answer this in depth).
Secondly, buy some ETFs (Exchange traded funds). You can get the same diversification, with less overhead, less minimum investment , and more liquidity with ETFs!
Thirdly, any monies you put into investments, go ahead an put into a ROTH IRA. I'm presuming you're at a lower tax bracket now than you will be at retirement. So using your after tax dollars in a ROTH IRA will be allowed to grow tax free until retirement. Additionally, when you withdraw the money, it's all tax free too (under current law). Gotta love that!
Congrats on taking an interest at a young age. If you do so consistently and continue to educate yourself on investing, you'll find yourself able to retire much sooner than many of your peers!
Hope that helps!
Dorothy Said:
Hi All, How do we go about analysing two mutual funds? What the components used to bring two fund on par?We Answered:
Use the fund comparison and screening tools at www.morningstar.com.Sharon Said:
What is the difference between a blend, value, and growth mutual fund? What is the best fund?We Answered:
First, in any fund, buy a no-load. I recommend the Vanguard family because they have very low operating expenses. During any long-to-mid-term, this will be a major factor. as to Value, Growth, and Blend, I would characterize them this way:Growth: Low/No dividends, high P/E, compared to S&P 500
Value: Low P/E, compared to S&P 500 funds.
Blend: A mixture (blend) of both Growth and Value stocks.
One can utilize any broad "Average" , but S&P 500 is common
The "best fund" depends on your age, goals, and (more or less) your patiences, needs, and what your financial condition is.
Laurie Said:
What are the benifit to growth funds?We Answered:
A growth fund is a fund where the assets within the fund are diversified in such a fashion as to maximize (as best as the Fund Manager can) on capital appreciation; which generally entails having companies within the Portfolio that DO NOT issue dividends.A growth/income fund is similar to the growth, but the portfolio of stocks will include companies (usually Large Cap) that are poised for strong growth AND also issue dividends (the income aspect).
The important point to note is the presence of dividends. A dividend is considered a bad thing if your sole obective is strong aggressive growth. Reason being, the money the Company is giving to its Shareholders could be better spent on growing the company (the opportunity cost of capital): by paying off debts, modernizing, etc. A dividend is also a tax burden on the Shareholder, as it is taxed as Income come tax season, regardless of whether it goes to your bank account or stays within your mutual fund.
Without seeing your choices I would say that growth funds are valuable because they focus on strong growth without the tax risks (capital gains, interest payment, dividend payouts). This means that the money invested within these companies is being efficiently applied, which will recipricate itself into your portfolio. Generally, these type of funds are the top performing funds, which means for the individual investor, their investment is yielding very positive returns for their money.
Jessica Said:
Kindly suggest four best growth mutual funds in India - for long term investment?We Answered:
hi sir.. i am a investor in mutual fund.. for long term growth u invest in midcap funds.. which will yield a medium return and also less risk.. see about IDFC premier which yield a goood return for past 3 yrs..