Top 10 Reasons To Buy A Mutual Fund

Author: Arthur Miller

1. Mutual Funds Offer Diversification:
The beauty of a mutual fund is that you can buy a mutual fund and obtain instant access to a hundreds of individual stocks or bonds. Otherwise, in order to diversify your portfolio, you might have to buy individual securities, which exposes you to more potential volatility.

2. Mutual Funds are Professionally Managed:
Many investors don't have the resources or the time to buy individual stocks. Investing in individual securities, such as stocks, not only takes resources, but a considerable amount of time. By contrast, mutual fund managers and analysts wake up each morning dedicating their professional lives to researching and analyzing current and potential holdings for their mutual fund.

3. Mutual Funds Come in Many Varieties:
A mutual fund comes in many types and styles. There are stock funds, bond funds, sector funds, target-date mutual funds, money market mutual funds and balanced funds. Mutual funds allow you to invest in the market whether you believe in active portfolio management (actively managed funds) or you prefer to buy a segment of the market with no interference from a manager (passive funds and index mutual funds). The availability of different types of mutual funds allows you to build a diversified portfolio at low cost and without much difficulty.

4. Mutual Funds Have Low Minimums:
Many mutual fund companies allow investors to get started in a mutual fund with as little as $1,000. Schwab's mutual fund family has a minimum of $100 for many of their mutual funds.

5. Systematic Investing and Withdrawals with Mutual Funds:
It is simple to invest regularly in a mutual fund. Many mutual fund companies allow investors to invest as little as $50 per month directly into a mutual fund. Money can be pulled directly from a bank account and invested directly in the mutual fund. On the other hand, money can be regularly withdrawn from a mutual fund and be deposited into a bank account. There are generally no fees for this service.

6. Mutual Funds Offer Automatic Reinvestment:
An investor can easily and automatically have capital gains and dividends reinvested into their mutual fund without a sales load or extra fees.

7. Mutual Funds Offer Transparency:
Mutual fund holdings are publicly available (with some delays in reporting), which ensures that investors are getting what they pay for.
                                                                                                                                             
8. Mutual Funds Are Liquid:
If you want to sell your mutual fund, the proceeds from the sale are available the day after you sell the mutual fund.

9. Mutual Funds Have Audited Track Records:
A mutual fund company must maintain performance track records for each mutual fund and have them audited for accuracy, which ensures that investors can trust the mutual fund's stated returns.

10. Safety of Investing in Mutual Funds:
If a mutual fund company goes out of business, mutual fund shareholders receive an amount of cash that equals their portion of ownership in the mutual fund. Alternatively, the mutual fund's Board of Directors might elect a new investment advisor to manage the mutual fund.

While there are a plethora of investment options (individual stocks, ETFs, and closed-end funds, to name a few) a mutual fund can offer a simple, efficient way to invest for retirement, education or other financial goals, by  Lee McGowan, About.com.

Waiting on a New Stock Market Catalyst

I had to share this article for those that have an interest in the stock market.  The author Mitchell Clark  knows his stuff and the information that he shares could help those people who are looking to make their mark in the global stock market.  Please read and commit to start a dialog.

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Waiting...on a New Stock Market Catalyst 

Author: Mitchell Clark

The catalyst we need for a sustainable stock market advance isn't yet present. Economic news still isn't strong enough to warrant rising share prices. While corporate earnings are mostly solid, expectations for earnings growth over the coming quarters are modest at best. This makes the potential for a bullish stock market highly very low.

As I've written previously, I would be happy if the S&P 500 Index would hold around the 1,300 level for now. All of last year's investment risks remain, but it's pretty obvious that investors have grown tired of thinking about the eurozone debt crisis. A Greek default is almost assured and, while this will pressure the euro currency, the news is already priced into the stock market.
What are holding the equity market at its current level are decent fourth-quarter earnings and reasonable valuations. This is a difficult market in which to make predictions, but there is a growing probability—in my view—that the stock market will perform similarly to last year. A strong start, followed by consolidation and then correction is likely to reflect the change in earnings expectations this year. The economic news is mostly expected to be what it is now—lackluster. So, with the expectation for modest gross domestic product (GDP) growth, it's difficult to imagine improving corporate visibility. Industry specific economic news should continue to be varied this year, with some sectors significantly outperforming others. The certainty about interest rates is useful, but it's also a sign that the Federal Reserve expects the economy to continue to be difficult. There's no bright light at the end of the tunnel yet; it's continued mediocrity for next while.

With the expectation of choppy economic news and the likelihood of declining earnings expectations over the coming quarters, individual stock selection is absolutely key in a market without a tailwind. (See Austerity, Inflation, Sovereign Debt & Earnings Growth—An Investor's Survival Guide.) Price strength in gold, silver and oil is a necessary confirmation if the stock market is going to advance further in a meaningful way. My view is that the stock market will be holding up well if the S&P 500 index can build a base around 1,300. As I said, the economic news isn't yet strong enough for share prices to make a big advancement. Good corporate earnings were the catalyst for a strong January, but the stock market's next catalyst is elusive.

Very shortly, the market will be in the "lull" between earnings seasons and this makes share prices that much more vulnerable. With only economic news and geopolitical events to go on, investors will be skittish. Accordingly, the trades in the stock market will be event-driven or corporate-specific only. A general investment strategy in this kind of market isn't likely to work too well. Outperformance is all about owning the right stories at the right time. Fortunately, the economic news right now isn't bad enough to cause a major decline in sentiment. If we can hold around the current level, the stock market will be doing well.

About the Author
With Profit Confidential we analyze the actions of the stock market, precious metals, interest rates, real estate and other investments so we can tell you what we believe Today's Financial News will mean for you tomorrow!