MY EBOOK! http://www.ryanoscribner.com/stock-trading In this video we will be discussing the investing basics of mutual funds. A mutual fund is a pool of securities such as stocks, bonds and money markets. The fund itself is operated by money managers who invest the funds capital attempting to produce capital gains and income for the investors. The portfolio of the securities involved in a mutual fund are structured to fit the investment objectives of the fund. Mutual funds are something many beginners get involved with for a number of reasons. The investing basics of mutual funds are easy to understand. Mutual funds give the investor a broad exposure because they are heavily diversified. They are also a way for a small investor to have professional money management. The value of a share of a mutual fund is represented by the NAV, or the net asset value. This is determined by dividing the total value of the securities by the outstanding shares available. Mutual fund performance is tracked by calculating the entire fund’s market cap, derived from clustering the performance of the underlying investments in the fund. The following fees may be associated with a mutual fund: Advisory Fees Management Fees Administrative Costs The fees associated with a mutual fund may be structured in different ways. A front-end loaded mutual fund has the fees assessed at the time of purchase. A back-end loaded mutual fund has the fees assessed when the investor sells shares. Lastly, a no-load mutual fund has no commission or sales charge because they are sold directly by an investment company, no other parties are involved. Investing Basics of Mutual Funds | Advantages and Disadvantages Advantages: Highly diversified, broad exposure, minimizes risk. High demand for most funds, easy liquidation. Professional management of fund, little or no investor involvement. Easy comparison from fund to fund. Disadvantages: May have high fees associated with commission, advisory fees. Index may outperform the fund itself. Higher risk funds may have higher advisory fees. Funds cannot be traded intraday, NAV is settled at the trading day end. Mutual funds are not very tax efficient. The last disadvantage to mutual funds needs some explaining. A fund can be dragged down by the individual investors. Most seasoned investors understand the principle of buy low and sell high however not everyone is a seasoned investor. Novice investors in the fund may choose to sell in a bear (down) market forcing the fund to liquidate securities in order to pay the investors. This can drag the NAV of the mutual fund down. Website http://www.ryanoscribner.com Follow me on Twitter! https://twitter.com/RyanOScribner Personal Fitness Coaching http://www.ryanoscribner.com/shop Related Videos: How does a Mutual Fund work? https://www.youtube.com/watch?v=U8363dfQkFU What Should I Know When Buying Mutual Funds? https://www.youtube.com/watch?v=JUk9WCD-QtA Investing Basics: Mutual Funds https://www.youtube.com/watch?v=MNEKXrCUV_0 Related Articles: Investopedia | Mutual Fund Definition http://www.investopedia.com/terms/m/mutualfund.asp US News | Best Mutual Funds http://money.usnews.com/funds/mutual-funds If this video brought value to you, please leave a like! If you are looking to find out more about anything I discussed, drop me a comment or contact me on Twitter. Subscribe to be updated on my journey through life! About Me: My name is Ryan Scribner. I am a nutrition and fitness crusader and I consider myself to be a life student of personal development. I am also an investor. I went from being an overweight college student to living at 8% body fat. About two years ago when I started weight lifting, I was completely clueless. I never played sports in high school and I had no base level of fitness established. I made many mistakes, but over time I developed an understanding. I want to help others develop the body, spirit and mind they deserve. In making mistakes along the way and learning from scratch, I have a lot of value to bring to the table. I recommend my content to those interested in the accumulation of wealth, fitness and nutrition as well as personal growth and development. Recently, I made my own happiness a priority after living with depression for over a year. I want to share with you exactly what I did to get to a state of perpetual lasting happiness. I have also spent a great deal of time learning about investment and wealth accumulation. While money alone doesn't bring happiness, it allows you to experience many things which do bring happiness. Start the journey. Involve the right mentors and coaches. Learn.
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