Investing | Fundamental Financial Advice By Patria

Jan 30

A mutual fund is an investment company that invests a pool of funds belonging to many individuals in a portfolio of investments such as stocks and bonds. Each shareholder in the pool owns a percentage of the mutual fund’s (investment company’s) total portfolio.

The yield of a mutual fund evaluates the investment performance of the mutual fund by measuring the dividend income that the mutual fund pays to shareholders, as a percentage of their investment, after deducting any fund expenses. However, in order to calculate the yield of a mutual fund, we need first to calculate the net asset value of the mutual fund.

The net asset value (NAV) of the mutual fund depends on the value of the portfolio of the stocks. For example, a mutual fund sells 20 million shares at a price of $10 per share for a total of $200 million. The net asset value (NAV) of the mutual fund is the price per share, i.e. $10. If the investment company decides to invest in stocks that have higher market value and the market value of the stocks in the portfolio increases to $250 million, then the price per share would be $250 million / 10 million shares = $25 and this is the net asset value (NAV) of the mutual fund.

Having derived the net asset value (NAV) we can calculate the yield of the mutual fund. Assuming a net asset value (NAV) of $25 according to our example and a dividend paid to shareholders from the interest earned on the stocks in the portfolio of $2 then yield is calculated as the quotient of the dividend over the net asset value (NAV). Therefore, in our example the yield of the mutual fund is 2$ / $25 = 8%.

Important considerations

Normally, the yield of a mutual fund is annualized so that investors can follow easier their year returns.

A yield makes sense if investors have invested on the date that the yield is based on. Otherwise, it is a simple comparison of different funds’ yields.

A yield is directly related to market interest rates so that it follows exactly the market fluctuations.

A yield is calculated both based on simple (one time invested) and compounded (reinvested) interest rates.

Capital gains are not included in the calculations of the yield of a mutual fund because they cannot be accurately quantified since they are subject to market fluctuations.

Assuming above example of a net asset value (NAV) of $25 and a dividend of $2, we found that the yield is 8%. If the price per share decreases to $20 and therefore the net asset value (NAV) would be $20 instead of $25, then the yield of the mutual fund will be $2 / $20 = 10%. So, the yield increases, however the price per share has decreased. Therefore, investors should follow their investments on a regular basis in order to be able to reallocate their portfolio of stocks and keep control of the value of their portfolio as much as possible, given also the market fluctuations.

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Christina Pomoni asked:

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Jan 30

Get Reviews On Mutual Funds Stock And Investment Banker

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shruti asked:

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Jan 29

19 and want to get the ball moving in 2009?

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nivek asked:

Ok, so don’t throw any dumb comments my way cos it def won’t be appreciated. To start off, im almost 20 and i thought it a better time than any to start saving money and investing my money, for later. Now im not an economics/finance expert but i AM aware that the market is at an all time low and investments aren’t exactly the best things to be looking at right now BUT i think there’s some prospect there.Given my age (and a result my obvious income limit) investing large amounts is definitely not an option. Ive done some reading on things like broad market index funds and the likes, and i think i could buy into one of those given that the market is sooooo low right now.
Ok my ramble being over the true question here is, do u think investing in 2009 is wise of me? and if so where do u think would be a good place for someone like myself (beginner) to start off!

THNX , any replies would be gr8

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Jan 29

BWX versus PFBDX?

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great_and_mighty_adam_levine asked:

Ik ben geinteresseerd in het investeren van een klein gedeelte van mijn portefeuille in een fonds van de wereldband, en mijn kortingsmakelaar heeft fundamenteel twee fatsoenlijke opties - BWX (ETF) of PFBDX (een Beleggingsmaatschappij).

De prijzen zijn dicht. PFBDX heeft een hogere uitgavenverhouding, maar geen transactiekosten.

De historische prestaties zijn bijna identiek, zoals u van twee indexfondsen in de zelfde sector zou denken.

PFBDX' s de holdings zijn BIZAR. De hoogste holding voor PFBDX is de Toekomst van de Schatkist van de V.S., geen die ik Van een fonds van de wereldband zou verwachten. Ondanks dit, past de gelijken van de prijsgrafiek dicht BWX aan. BWX investeert in wereldbanden, zoals verwacht.

Ten tweede, is BWX " diversified" , terwijl PFBDX &quot is; niet -niet-diversified". I don' t weet of maakt dit een verschil in mijn keus.

Verbindingen met holdingsinfo:
http://quote.yahoo.com/q/hl?s=BWX
http://quicktake.morningstar.com/fundnet/Holdings.aspx?Country=USA&Symbol=PFBDX&fdtab=portfolio
Correctie:
PFBDX is geen indexfonds, is het een geleid fonds met prestaties en prijzen die dicht op het concurrerende indexfonds (BWX) lijken.
Dit fonds is bedoeld een klein gedeelte van mijn portefeuille te zijn, hoofdzakelijk om risico door diversificatie te verminderen. De banden van de wereld zijn niet gecorreleerd met de rentevoeten van de V.S., voorraadprijzen, of goederenprijzen - zij hebben op en neer hun eigen onafhankelijke schommeling.

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Jan 29

C

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David M asked:

Tengo porcentajes de mi lista en EAFE y fondos de

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