 Can anyone explain where the money goes that is put into a "stock"? |
here is the question again that was asked before.
I understand that it is "demand" and blah blah blah,
but what i am asking in this question is logically thinking ... |
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 Why does a stock go down 19% on good news sometimes? |
Additional Details
By good news I mean, profits rose tremendously and the company gave good guidance out into the future!... |
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 What would be the best way to invest $10,000 for 6 months with no risk of losing it.? |
| I'm looking to earn some interest over 6 months and then use the whole amount for a down payment on a new car that comes out spring 2008... |
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 Business Plan? |
| I am thinking of setting up my own business but first I need to draw a business plan. can anyone help?... |
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 Are Premium Bonds a good investment? |
| Over the years I have managed to save up a few pennies in an ISA account. I am thinking about using some of my savings to buy around £500 to £1,000 of Premium Bonds. Do you think it is worth it or ... |
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 Investment suggestion? |
| I'd like to invest my $, but I don't know much about it. I have been reading some books about investing $ in corporate bonds, growth mutual funds and agressive growth mutual funds. Which ... |
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 What is the best investment? |
| what is the current safest investment with best ROI... |
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 What would happen if I won something on ebay but i don't want it anymore? |
| My mom told me to buy a used calculator, thinking that it would be cheaper and it but not cheap enough for her. Now she wants to buy a new calculator that way she is assured a warrenty if anything ... |
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 Why is dow dropping points ? |
| like i read the news and everyday its like dow dropped 700 points OH NO what happened? why is it happening ans what does it effect im just curious?... |
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| ISA account? |
| It is said that you can have 1 account in a tax year.If Iam planing to open one now(Feb) can I open another one after April??... |
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 What would you do in my situation? |
Before the dot com bust I had over 1/2 million in investments.
After the crash and at the low it went down to 190K.
Now, after the recovering and investing more I am almost at ... |
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 Do you ever wish that your parents would've bought stock in Google or Wal-mart? |
My mom was smart... why couldn't she have bought Google stock? Or Wal-mart? Damn we'd be rich!
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Or any other various company with high stock prices........... |
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 How should I invest $150k? |
I have 150k sitting in money market , earning just 4% .
Anybody have any ideas on how to invest, it is too late to jump into the stock market ? how about real estate? party is over ?
<... |
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 Why do I have to wait three market days after the day I buy stock? |
| I'm new to investing and wanted to do some day-trading. I purchased some stock and sold it the next business day. I was told by investment services that I have to wait three market days after ... |
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Verronika Andrews | Has anybody lost money by investing in MUTUAL FUNDS? |
If yes, then how? What are the precautions one must take while investing in Mutual Funds.
Is UNIT TRUST equally safe? What is the difference between Unit Trust and Mutual Funds? |
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Thin Kaboudit
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Over the long-term, it is very difficult to lose money in mutual funds (unless you just buy ones that you should have KNOWN were a bad idea! "We promise 50% return every year!", etc.)
When you buy a single stock, you are betting that particular company will continue to succeed; if you buy a typical mutual fund, they "pool" your cash with others and buy stock in sometimes THOUSANDS of different companies, thus diluting the impact of any particular company failing. Most funds are "managed" and have supposedly smart people deciding what to buy and sell and when to do so.
Unit Trusts are a similar concept to mutual funds, except they have already made the decision on when they will sell a particular company's shares before they buy it.
If you invest for the long-term, and buy reputable funds or UITs that invest in a broad market, it's hard not make 10% a year on average, which means your money will double every 7.2 years... |
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CinderBlock
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Yes, unfortunately. There's NEVER a guarantee that mutual fund unit share prices will rise, and in fact they go down quite often. |
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muncie birder
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A unit trust is unmanaged. It is a collection of investments compiled and sold as a unit to investors. They are normally bonds. As the bonds mature the money is distributed back to the holders of the trust. Mutual funds are managed investments that are bought and sold as thought appropriate by the management. Neither is completely safe.
People do in fact loose money investing in mutual funds. Perhaps an example will be appropriate.
ASMGX is a fine example. This has got to be one of the worse mutual funds out there. If someone had purchased it in 1999, they would have lost an average of 22% annually through 2002. Made money in 2003 but not enought to make up for the previous 3 years. Then in the following years 2004 and 2005 guess what? You are right. It lost money again both years. |
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Supra1Q
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Yes. Most mutual funds underperform the general market averages. One reason most are tied to particular industries, sectors, geo's, cap, etc... and therefore their hands are tied in what they can invest in and have to ride the down waves even if their particular areas is getting killed. Look at Morningstar.com to find the ones with the best track record, management, etc... Example - FLATX, FSEAX, FHKCX are ones I've been in since the 2003 bull market took off. They correct deeper then US markets, but go up much higher, right now they are in the high teens ytd vs US markets..... Some prefer more recent instruments called ETFs, which give you broader diversification in the designated areas vs Mutual Funds which try to select the best stocks in those areas. As far as Unit Trusts, they are like Mutual Funds but not activily managed, and sometimes tout less expenses, but can have other more costly fees. Whatever you pick, make sure you can get an independent rating on it.
Unit Trust
Definition
An SEC-registered investment company which purchases a fixed, unmanaged portfolio of income-producing securities and then sells shares in the trust to investors. The major difference between a Unit Trust and a mutual fund is that a mutual fund is actively managed, while a unit investment trust is not managed at all. Capital gains, interest and dividend payments from the trust are passed on to shareholders at regular periods. If the trust is one that invests only in tax-free securities, then the income from the trust is also tax-free. A unit investment trust is generally considered a low-risk, low-return investment. Some investors prefer Unit Trusts to mutual funds because Unit Trusts typically incur lower annual operating expenses (since they are not buying and selling shares); however, Unit Trusts often have sales charges and entrance/exit fees. also called fixed investment trust or participating trust or Unit Investment Trust (UIT). |
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Franco
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Unit trusts is the name used in UK for what the Americans call mutual funds.
Most mutual funds (and UT) lose money when the market sector they are invested in, falls. Eg. in 2003, the S&P500 index fell by 29.6% and the average UT fell by 32.6% (in terms of UK£). People who had investments in them did no break even until 2007.
By contrast, people who had their money in bank accounts, were collecting their interest and laughing all the way. These are the risks of the stock market people are talking about. |
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ssunderagarwal
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Generally it is No but Yes only the schemes framed by Unit Trust of India for Unit Scheme 1964 which was a type of mutual fund and during Harshat Mehta their most of the investments became bad or under valued, the government had no option but to reduce the face value of the units. |
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snck
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You can lose money in anything if you sell at the wrong time. Mutual Funds are a category of investments that can be tied to the performance of MANY MANY different things. There are MFs that invest only in Domestic Stocks, some in only Foreign Stocks, some in Asian stocks, South American Stocks small stocks, big stocks, medium stocks, tech stocks..... the list is almost endless. You could very well invest in a MF that tracks US Blue Chips and under perform or lose money while a MF that invested in Russia went up like a rocket.
There is also a nasty little secret about Mutual Funds people don't talk about and that is the tax liability generated by the churn/turnover in the accounts. It is possible to have the valuation of your funds go down while being billed for taxes on the sale of investments the fund made through out the year.
Personally, I have never when a choice was provided invested in a mutual fund. There are much better vehicles out there for those trying to avoid individual stocks like ETFs. Course this is my opinion and you should seek professional advice not that of some hothead on a message board. When you do seek that professional advice, make sure he/she fully discloses the commissions/profits they make off the sale of each item they direct you towards. I find all to often the broker or investment adviser steers you towards some product that reaps maximum profit for them....not necessarily you. |
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kate
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Have never heard of a unit trust but ,
I went over about 10 of my friend's mutual funds for him to see what they were invested in . . .
Most were in financials and hardware . . .
Most had some gain for the previous 12 months but because of the financials ,
Had about 10% to 15% drops since July .
YES , people loose $$$ in mutual funds because they are just a bunch of stocks .
If stocks go down , mutual funds will too .
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Nidhi
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Yeah, MFs can loose your money. You should do your homework. Here is a primer:
http://creating-wealth.blogspot.com/2007/06/how-to-select-mutual-fund.html |
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