Mutual Investment Funds

As pointed before, the most substantial changes experimented in the real estate security investment has been the fast apogee of the mutual funds of investment. The constant money flow is mostly due to the deposits of retirement accounts from those born after the war, that, having reached their maximum income years, are afraid that the social security system will crumble of that will not be able to attend to their needs.

Be it for fear of for greed, the truth is that you are putting money in a mutual fund without taking in account the possibility that the funds selected is or not appropriate for your objectives and needs. Many times you take more time thinking in what video tape you are going to rent than in studying the possible investments to do for your retirement.

The entities of mutual funds know this and they have structured advertising campaigns that are strengthen by these attitudes; and so we see how they emphasize on security, in how extraordinary will your investment increase or how simple it is to invest.

An average investor would find it difficult to describe the criterions of investment of the mutual funds that form part of the typical retirement portfolio.

Selection of a Mutual Fund of Investment
The main characteristics of which an individual investor is first conscious when selecting a mutual fund are the diversification and its expertise.

When investing in a mutual fund, the investor endorses a great deposit of money which will be administer in a professional way, due that a fund counts for their operations with a great amount of money, it is possible for them to invest in several companies for in this way to minimize the risk. An individual investor that is not very wealthy doesn’t have any access to competent or experimented analysts and managers in the investment field; but if this investor joins its money with that of other small investors and form a mutual fund, it is very probable that they might have and access to the help of these professionals.

In the present there are more than 10,400 mutual investment funds on the United States; the numbers of these funds have experimented a rise of 900% inn the last eight years.

When the average investor talks about a mutual fund he is referring to one of the open variable interest investment funds, from which there are about 4,000, that is, more than the number of share emissions traded on the New York stock exchange market. Due to the rising number of these funds, the investor has before him an extraordinary number of options from which to choose, due that they all promise something different from what the others offer or some say that they are better than other fund that has the same investment politics.

Long-term statistic date indicates that only 15% of these 4,000 funds excels in a continuous form the Standard & Poor’s 500, which is the measuring pattern used.

How should an investor know what fund to choose?
A good starting point would be to learn the terminology and basic concepts of the product, because don’t be mistaken: a mutual investment fund is a product, and as all products it is developed, canned and sold. In this sense, the stock exchange agencies point out that 65% of the mutual funds are “sold”, not “bought”. To the investors they sell the “advantages”, but not the “information” there are all kinds and sizes of mutual funds for all types of investors. The fund are classified as limited and unlimited, with burden or without burden, by sectors, by countries and by types of investments; and this is just to name a few of these distinction.