Blackstocks.com: In the Know

Show Me The Money

Make Your Savings Earn More For You

According to a study, Americans keep more than $1 trillion in low-interest rate savings accounts, often for convenience and a desire for easy access to their cash. 

But by shifting that money into safe, higher-yielding accounts, you could reap $30 billion to $50 billion in additional interest yearly, says the Consumer Federation of America and Providian Financial Corp. that commissioned the study. 

Low-yielding savings accounts that are earning on average 2.1 percent are widely held by consumers, no matter the age, income or education, the groups said. But Americans 65 and older may be losing out more than other age groups because they are more likely to hold accounts with $25,000 or more. 

One of the dangers is in keeping money this way is that for the things they want in life you come up short. The other danger is that, failing to see any kind of satisfying return on your money, just might not excite you about saving. In other words if you are not growing your money, then why should you save?

How can we put our money in proper places? 

Here are several options: 

1) Money market mutual funds, now paying 5.5 percent to 6.5 percent in taxable funds. They invest in Treasury bills, commercial paper and other short-term obligations, and though not FDIC insured, are widely considered safe. One can write checks, although many funds require a check to be a minimum amount.

Selecting a Mutual Fund

Your 401(k) plan is set up, and you're trying to choose a mutual fund from the list of six, eight, ten, or more that your plan sponsor handed you. Where do you begin? Well, there's always the "close your eyes and point" approach, but while that might save time now it certainly won't guarantee you the best return on your money. Neither will asking your colleagues for advice on "hot" mutual funds. (There's no such thing, as you'll read later.) If you really want to make the most of your 401(k) investment, you'll need to put on your detective's hat and trench coat for a few minutes and do some investigating.

With any purchase, your most important first step is to figure out exactly what you need. Before buying a mutual fund, you need to ask yourself the following questions:

What is my investment goal - capital appreciation, or income, or both?

What other investments do I currently have?
These are important questions, because they will help illustrate what kind of mutual fund will balance out your investment portfolio (your collection of investments).

Finding the Right Mutual Fund

The key question: "How to choose?"

As investors, we have a mind-boggling number of funds to pick from. At last count there were about 7,000. This number is still growing.

In fact, mutual funds outnumber stocks traded on the Nasdaq Stock Market -- 4,840. And new funds are coming out all the time. 

So how do we select the funds that are right for us?

How do we remove the “over” from overwhelming?

First, although looking at past performance gives clues - do not select a fund based only on past performance. Looking at the “biggest gainers” in the last quarter or year will not get the job done.

Mutual Funds How Do I Know What's Right For Me

Hi.
I found out about your company and website from Black Enterprise magazine.  I am about to sign up with my company's 401k plan. Which funds do I utilize? Growth, balanced, foreign, money market or what?  I want to spread it out and get the fastest return in a short time, since I waited so late (my kids are already in college).

And, how can I go about buying stock in Disney?

And lastly, which mutual funds should I consider. I want to retire early
( 50-55)?

Thanks a lot.

T.

/////////////////////////////////////

From The Desk Of Honey

Before we jump into in which funds we should invest, we need to step back and take a look at what our goals are. Why are we investing? What are we accomplishing by investing?

Ariel Mutual Funds - A Focused Approach

At Ariel Mutual Funds they've learned that one of life's greatest lessons also holds true when investing: slow and steady wins the race. Chasing the speedy and glamorous, the trendy or hot is not the surest way to reach a goal. Just like the fabled tortoise, the symbol of Ariel firm, Ariel values patience and persistence over the fleeting and flashy.

 

A Focused Approach

Many firms spread themselves across the entire financial services spectrum, dabbling in a variety of enterprises, but mastering none. In order to achieve our goal of steady, superior growth of capital over time, we at Ariel have always preferred to concentrate our efforts on research and investing. This focused approach helps us deliver outstanding long-term financial results.

 

Technorati tags: personal, life, money, love, inspirational, Alton Perkins, wealth, investing, African American, Mutual Funds, Books, Nasdaq Stock Market, Blackstocks.com, Growth Fund, Video, Stocks, www.blogblackstocks.com, Ariel Mutual Funds

Mutual Fund Basics

What is a Mutual Fund
A security that gives small investors access to a well-diversified portfolio of equities, bonds and other securities. Each shareholder participates in the gain or loss of the fund. Shares are issued and can be redeemed as needed.

The fund's net asset value (NAV) is determined each day. Each mutual fund portfolio is invested to match the objective stated in the prospectus. It has been shown in study after study that a majority of mutual funds fail to beat the market. Also, picking mutual funds purely on the basis of past performance usually does not work.

Mutual funds have become extremely popular over the last 20 years. What was once just another obscure financial instrument is now a part of our daily lives. More than 80 million people, or one half of the households in America, invest in mutual funds. That means that, in the United States alone, trillions of dollars are invested in mutual funds.

In fact, to many people, investing means buying mutual funds. After all, it's common knowledge that investing in mutual funds is (or at least should be) better than simply letting your cash waste away in a savings account, but, for most people, that's where the understanding of funds ends. It doesn't help that mutual fund salespeople speak a strange language that is interspersed with jargon that many investors don't understand.

Originally, mutual funds were heralded as a way for the little guy to get a piece of the action. Instead of spending all your free time buried in the financial pages of the Wall Street Journal, all you had to do was buy a mutual fund and you'd be set on your way to financial freedom. But it's not that easy. Mutual funds are an excellent idea in theory, but, in reality, they haven't always delivered. Not all mutual funds are created equal, and investing in mutuals isn't as easy as throwing your money at the first salesperson who solicits your business.

For a list of African American Managed Mutual funds go here.

 

Technorati tags: personal, life, money, love, inspirational, Alton Perkins, wealth, investing, African American, Mutual Funds, Books, Nasdaq Stock Market, Blackstocks.com, Growth Fund, Video, Stocks, www.blogblackstocks.com

How Stable Are Stable Value Funds?

Does your 401(k) plan offer a fund with "Stable Value," "Income Fund" or "Stable Return" in the title? If so, you've probably got access to a stable value fund. This type of fund, available in two-thirds of all employee-directed 401(k) plans, can be an attractive alternative to money market funds and bond funds.

Stable value funds are not necessarily the conservative investor's road to Shangri-La, however. There is a slim chance of losing money with a stable value fund investment, although the market risk is generally less than with a stock or bond fund. What's more, in a period of rising interest rates and increasing inflation, your return may decline, possibly becoming lower than the inflation rate.

Stable value funds are available to participants in defined contribution savings and profit-sharing plans, and Individual Retirement Accounts (IRAs), and they are beginning to show up as mutual funds available to individual investors. They are included in two-thirds of employee-directed 401(k) plans, and represent approximately 15% of assets in those plans, according to the Employee Benefit Research Institute.

Here's a look at stable value funds and how they work:

Mutual Funds behind The Scenes

The History of Mutual Funds
Mutual funds blossomed in the 1970s along with IRAs and 401(k)s; consequently many of us may assume that mutual funds were born along with Generation X. In fact, they have been around for 75 years and have seen a lot of changes.

The first "open-end" mutual fund - the Massachusetts Investors Trust - was created 75 years ago. Since then, the number of funds and firms that manage them has grown tremendously.

Mutual funds were created with the goal of giving middle-income investors a chance to pool their assets to buy a range of stocks and achieve diversified portfolios. Before the 1920s, most of those investors kept their money in banks, or bought shares in individual stocks.

The first mutual funds had higher minimum investments than what we are used to today, and were really still only an option for relatively well-heeled investors. They were also smaller than today's funds, and were comprised mainly or entirely of stocks. For example, when the Massachusetts Investors Trust was introduced in 1924 it held 45 stocks and $50,000 in assets.

It wasn't until the 1970s that the fund industry began catering to the average investor by offering lower minimum investment requirements and more variety. Mutual funds and money-market funds benefited from their ability to offer interest rates that were higher than what banks were allowed to pay on interest-bearing checking accounts, and also from the introduction of IRAs in 1974 and 401(k) plans in 1978.

(If you've ever wondered why banks were driven to offer free toasters to new customers, here's your answer - it was partly because of the intense competition created by mutual fund and money market funds for your money.)

How Do You Choose a Mutual Fund? Carefully

In figuring out what mutual fund to select, your  first step is to figure out exactly what you need. Before buying a mutual fund, you need to ask yourself the following questions:

What is my investment goal - capital appreciation, or income, or both?

What other investments do I currently have?

These are important questions, because they will help illustrate what kind of mutual fund will balance out your investment portfolio (your collection of investments).

Three categories
Mutual funds can be roughly divided into three categories - stock (or equity) funds, bond funds, and money market funds. If you are a younger investor saving for retirement (with a longer investment "time horizon"), you will probably want to emphasize capital appreciation by investing in stocks. Investors who are closer to retirement would probably want to reduce the volatility associated with stocks and move to more stable, but lower return, bond or money market funds.

Conseulo Mack Wealth Track - Mutual Funds

Conseulo Mack Wealth Track - Mutual Funds

Highly rated mutual funds that are as different as different can be.

Take a  look on Conseulo Mack Wealth Track . The right track to your financial wealth.

Click to go to the Wealth Track Video

Technorati tags: Alton Perkins, www.blackstocks.com, investment bank, mutual funds, videos, Conseulo Mack, African American