What makes a good mutual fund

Mutual funds are popular. If you are not invested in one right now you are more than likely to be invested in one in the near future either directly or indirectly. Choosing a good mutual fund is important for maximizing your investment performance.
Like any other investment choosing a good mutual fund really depends on your needs. Also like any other investment mutual funds are a balance between risk and performance. The higher the risk you are willing to take the higher the potential profits. Investing in individual stocks is considered riskier than investing in mutual fund although the potential gains are higher. Mutual fund usually hedge individual stock risk by managing a large portfolio of stocks and other instruments. That balance also averages the gains.
There is no simple answer to what makes a mutual fund good as the question is fundamentally wrong. The right question is what makes a mutual fund good for you and the answer depends on what you are looking for. In order to choose a mutual fund you choose both know what your options are and also really know and understand what your needs are and how much risk you want to take.
One of the more common mutual funds that tend to perform well at a lower risk are index mutual funds. Like their name suggests index mutual funds value is attached to the performance of a specific index like the famous S&P 500. Index mutual funds are pretty simple to understand and to track and for the most part there is no big difference between different funds if they invest in the same index.
Other funds invest in stocks and other instruments. Most funds have a theme or a policy of how they invest. For example, a small cap fund invests in stocks of small cap companies and an technology fund invests in technology innovative companies. Themed mutual funds are managed by people who decide what to buy when to buy and when to sell each of the individual stocks. One of the most important things when choosing a mutual fund is to read about who manages its daily operations and who decides how the fund invests its money. Check how experienced the management is how long have they been with the fund and with other funds and how well have they done. Although a manager they did very well in the past can certainly fail in the future it is still statistically a better choice than an inexperienced manager or a manager who failed.
Since mutual funds have managers and other operation costs they have to charge some management fees. Usually, the management fee is expressed in a percentage that the fund takes for itself. If you are investing long term that fee is less important. If you are looking for short-term investments the fees can be significant and you should consider them when choosing the fund.
Education is your best tool when choosing a fund. Don’t be tempted to invest in a fund just because its headline says 25 per cent annual gain. Read about it read about the management read about its investment philosophy and maybe even look at its portfolio and randomly pick a few stocks it is invested in and judge for yourself if those were good buys or not.

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Buy Gold and Silver Now - 7 Valid Reasons to Be Investing in Silver and Gold Bullion

By: Christina Goldman

It would appear, from the recent action in the financial markets, that all is well in the world once again. The price of crude oil has now plunged 20 per cent from its recent record high of $145 a barrel. Stocks are rallying. The dollar has firmed.

Experts are now saying that the real estate market has bottomed. The commodity bubble has burst. Oil is on its way down to $100 a barrel. And soon, the year-long credit crisis, housing slump and economic slowdown will be just an unpleasant memory. The future is so bright you have to wear shades, right?

Not so fast.

Before you rush out and trade your precious gold and silver for depreciating paper dollars, take off those rose-colored glasses and examine the real facts behind the hype. Here are seven valid reasons to be investing in silver and gold bullion:

1. The Weak Economy Is NOT Improving

Retail sales for the month of July were disappointing. Wal-Mart's 3% same-store sales growth came in below expectations. Yes, Costco's results were the one bright spot - up 10%. However, when you dig into the details, you'll discover that the reason for the strong growth was the increase in gasoline sales. Back those figures out and sales were up only 6%, less than consensus estimates!

Notably weak were the sales results of teen retailers. This doesn't bode well for back-to-school sales in August. Looks like a lot of kids will be returning to school, wearing last year's garb!

2. The Employment Picture Is BLEAK

Jobless Claims rose to 455,000. That's up from 448,000 the week before. Look for that figure to go up as job cuts by U.S. employers soared last month.

According to private placement firm, Challenger, Gray, and Christmas, Inc., layoff announcements are up 141% from a year ago. That's on top of the gloomy news unemployment figures reported by the Labor Department last week. The U.S. Economy has now lost jobs for seven straight months and the unemployment rate is at a four-year high.

3. Financial Markets Are STILL Unstable

Freddie and Fannie are seeing red. Both Freddie Mac and mortgage giant Fannie Mae missed earnings estimates by a wide margin, reported huge losses, and slashed their dividends.

If that wasn't bad enough, Freddie Mac now has a negative equity position. Translation: Shareholders would get absolutely nothing if Freddie were to pay down all of its debt and sell its assets. Fannie Mae's CEO predicts 'significant' losses in 2009 and will no longer purchase Alt-A mortgages, by year's end. These horrendous results increase the likelihood of a big government bailout.

4. The Housing Market Has NOT Bottomed

Mortgage delinquencies are getting worse. Mortgages that were issued during the 1st half of 2007 now have a delinquency rate of 0.91%. The delinquency rate for 2006 mortgages was 0.33%. These are prime mortgages, folks.

It has been estimated that 65% of sub-prime loans originated in 2007 will end up in default. This figure suggests that housing foreclosures will remain at record highs.

5. Inflation Is WORSE Than It Appears

The inflation monster is alive and well. The consumer price index (CPI) is up 5% through June. That is the biggest one-year increase since 1991. That statistic is even worse than it appears.

During the Reagan and Clinton terms, the way that rising inflation was measured was changed, in order to lower the official rate. If you calculate the CPI in the same manner that it was calculated in 1980, you would have to add 7% to whatever the published figure is. That would mean that the true rate of inflation is running at 12%. No wonder the average guy in the street is hurting!

Investors are betting that the drop in oil prices will tame the inflation monster. However, even with the recent correction oil prices are still up 61 per cent from where they were a year ago.

6. The Fed Will NOT Raise Interest Rates To Combat Inflation

The Federal Reserve is stuck between a rock and a hard place. As expected, the Federal Reserve held its fed funds target rate at 2%. The accompanying statement also reflected a rather dovish tone. The phrase 'diminished downside risks and increased inflation expectations' from the June 25th statement was nowhere to be found.

Fed funds futures are now pricing in just a 52% chance of a rate hike during the next to FOMC meetings. That's a fall from a prediction that was as high as 80 percent last week! Pimco's Managing Director Bill Gross said that rate hike talks are 'comical:'

"We're in a recession. When has the Fed ever raised rates in a recession?" he said. "Unemployment is headed toward 6 percent, mortgage rates on home buyers are at 7 percent, and these guys want to raise rates?"

7. Global Tensions are HIGH

Georgia's Offensive Move Is Risky. War broke out on Thursday in the strategically important area of Georgia, over control of South Ossetia. The price of oil seemed to take the situation in stride, doing absolutely nothing at all. At risk, however, is an international pipeline that runs close by, not to mention the possibility of the conflict setting off a wider war.

Gold and silver are now at their lowest level in six weeks, giving investors the perfect opportunity to buy. If you are still unconvinced that you should be investing in precious metals, just remember this:

History has provided us with many examples of paper money whose value has been destroyed. But, gold and silver have survived war, inflation, deflation, recession and depression. Silver and gold bullion are truly a safe haven for those smart enough to realize their true value.

Article Source: http://articlehideaway.com