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ETFs & Mutual Funds: Better Than Stocks - Yahoo Voices

There is a large group of traders who have in the market for decades who have previously dabbled in single stocks, and are now focusing their investments in exchange traded funds and mutual funds. There are several reasons for this. Mutual funds and ETFs are much more diversified than single stocks. When you hold an individual stock, you expose yourself to the risk of huge losses if there is any bad news for that particular company of the industry that company is in.

In a single day, a stock can drop as much as 10% to 20% when an unfavorable piece of news hits, or a company misses analyst expectations. These are big solid companies too, not just penny stocks. Major corporations such as, McDonalds, Apple, Kodak, household names are affected by these market swings on a regular basis. Mutual Funds and ETFs can also drop in price, but not nearly as much, because they are so diversified. Even if one or two stocks drop dramatically inside the mutual fund, there's a good chances that another 2 had fantastic days, and it will even out. This way when a couple of the companies that you are holding go down dramatically in a single day, you are much less likely to get hurt by it.

If you have a limited amount of money that you can invest, normally you wouldn't be able to buy very many shares of one single stick. This would prevent you from having a great amount of diversification. You are then vulnerable to swings which can be as much as 30% in one day! With mutual funds, there is a very small and reasonable management fee, however it's nothing compared to the huge benefits you will reap.

You also have the benefit of professional management inside a mutual fund. Mutual Fund managers spend all day every day figuring out which stocks you should buy and sell. They have access to every stock in the world on a real time basis and have teams of research analysts to examine annual reports, interview company executives, visit company sites, and review market trends. Mutual fund companies also have massive computer resources in order to determine which stocks are appropriate to buy, and there's just no way that one individual investor could compete with this mass of knowledge.

Finally, mutual funds will save you a lot in fees as opposed to if you were just to buy the stocks that the mutual fund had. You would have to pay $15 or so a pop for each stock that you buy and sell, but with a mutual fund, the entire mutual fund's fee is only $15, and it gets to be split among the thousands of investors in the mutual fund, so the expenses are much less.

Overall, mutual funds and ETFs are the way to go. There is substantially less risk, and when you get a high quality mutual fund manager, you will always make more money than by playing around with single stocks

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Checkbook IRA - What's іn іt fог you?

A retirement plan t??t ????w? ?n investor t? invest ?n traditional investments ???? ?? stocks, bonds ?n? mutual bonds ?? kn?wn ?? ???f directed 401k. If ??? w?nt t? t?? ?t??? types ?f investments ?t??? t??n t?? aforementioned ?n?? t??n ??? ??n rollover ???? 401k ?nt? ?n IRA account. T???? ??? tw? types ?f IRA t??t ??? ?????? kn?w ????t namely: traditional IRA ?n? Roth IRA T?? tw? IRA types ???? similarities ?n? distinctions. B?t t?? good part ?? t??t ??t? t???? IRA types ??n ?? utilized t? t?k? home m??? money. If ??? w?nt t? ?? t?? boss ?f ???? ?wn portfolio ??? m??t utilize ? checkbook IRA.

An??n? w?? takes part ?n ?n IRA account w??? n?t ?n?? ???? t?? power t? manage ??? ?wn portfolio ??t ?? w??? ???? ???? t?? chance t? choose ?m?ng ??? t?? ????????? investment options. Managing ?n investment portfolio ?? ? big responsibility t????f??? ??? m??t ???? ways ?n ??w ??? ??n track ??wn ???? investment returns m?? ?t ?? positive ?? negative. H???ng ? checkbook IRA w??? ????w ?n investor ??k? ??? t? recognize ?f ???? investment ?? making ? profit.

A? ? boss ?f ???? ?wn account, ??? m??t m?k? t?? ??g?t choices ?n order t? gain success ?n ???? investments. It ?? ??????? n? ?n? ???? w??? ?? blamed ?f ??m?t??ng g??? wrong w?t? ???? money ??t yourself. B?t t???? ??? ways ?n ??w ??? ??n avoid risks. On? w?? ?? t? choose t?? type ?f investment t??t ?? suitable f?? you.

A wise investor w??? explore ????? possibility ?? ??n g?t f?? ??? chosen investment. Study ?n t?? ????????? choices ?ft?? another. Investing involves money therefore, ???ng reckless ?? n?t acceptable ?n t?? investment industry ??????? ?t w??? n?t ?n?? lead t?? investor t? earn ???? ??t what's worse ?? t??t ?t ??n lead t? bankruptcy.

T? ?? lucrative ?n t?? investment industry ??? m??t ?? familiar w?t? t?? type ?f investment ??? w??? t?k? part in. If ??? ??? interested ?n lands ?? homes ?n? ???? experienced selling t??m t??n ?t ?? wise t??t ??? t?k? part ?n real estate investment. It ??nn?t ?? avoided t??t ?n t??? world t?? presence ?f swindlers ??? prevalent t????f??? ?t ?? ? smart move t? invest ?n ??m?t??ng t??t ??? ??? familiar with. Knowledge ?? crucial ?n investment ??????? ???? earnings w??? ?? ???? means t? meet ???? n???? ?n t?? future.

Documenting ???? transactions ?? essential ?n ????? investment. Recorded transactions ??n verify ?f ???? account ?? earning ?? not. Income statements ?? w??? ?? balance sheets m??t ?? prepared f?? ???? checkbook IRA. Remember t??t ?? important t? k??? track ?f ???? funds ?? w??? ?? ???? activities ?n?? ??? ??? managing ???? checkbook IRA. T???? ??? ????????? software ??? ??n ??? ???? ?? MS Money, Peachtree ?n? m?n? m??? t? manage ???? account well. Organize ?n? k??? ??? ???? documents ???? ?? invoices ?n? receipts ??????? t???? ??? needed ?????????? ?f ??? ??? g??ng t? file f?? tax returns.

Managing ?n IRA account ??n ?? q??t? costly ??t spending f?? management ?? ??tt?? ??t??? t??n letting ?t??? people manage ???? account. Utilize ? checkbook IRA n?w ?n? lessen ???? worries.

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The Top 5 Advantages of Investing in Mutual Funds - Yahoo Voices

A mutual fund is best defined as an investment vehicle made up of a pool of funds from outside investors. The mutual fund's goal is to use this pooled money from investors to purchase securities and produce capital gains for their investors. Each mutual fund will have a unique investing objective that is clearly stated in their prospectus. Not all mutual funds are created equally, so before investing in a fund you'll want to make sure it is a high quality offering. As a finance professional, I know there are plenty of advantages to investing in a mutual fund. Let's take a look at the five biggest benefits of investing in a mutual fund.

Top Five Advantages of Investing in a Mutual Fund

Pooled Money (Diversification)- Easily, the biggest perk of a mutual fund is the ability to receive instant diversification because of the pooling of money from investors. It is almost impossible to be this diversified with a portfolio of individual stocks, unless you are a millionaire. The mutual fund has given individual investors an easy way to manage risk through diversification.

Liquidity- As an investor, you should always think about how liquid an investment is before pulling the trigger. Some asset classes can be difficult to get out of in a timely manner, but with mutual funds this is not a problem at all. Mutual funds transact on a daily basis after the close of the stock market. If you want your money out, you won't have to wait long at all.

Low Expenses- Some mutual fund expense ratios are fairly high, but the reality is most mutual funds are quite cost-effective in the grand scheme of investing. Could you really purchase 100 or more stocks on your own and expect to pay less in commissions? By purchasing a mutual fund, you get access to so many stocks with just one transaction fee.

Professional Management- There is always something to be said for receiving solid professional management of your hard-earned cash. The sole job of the mutual fund manager is to research potential investments and help your investment gain in value. This takes some of the weight off your shoulders and allows you to simply track your investment periodically.

Past Performance is Readily Available- In the world of mutual funds, there is plenty of data available regarding how each fund has done over multiple periods of time. Since past performance should play a critical role in your decision-making process, the fact that this information is readily available is large benefit to investing in a mutual fund.

Sources: "Mutual Fund Definition"

SEC "Invest Wisely: Mutual Funds"

More from this Contributor:

Three Ways to Find the Cheapest Online Broker

The Five Worst Reasons to Buy a Stock

How to Speculate When Investing

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