Alternative Energy Mutual Funds
Purchasing alternative energy mutual funds are promising investments that look to the future especially with the boom of technology and the rising oil prices. Some of the areas that are promising include wind power, fuel cells, ocean energy, hydropower, energy conservation, solar power, hydrogen, biomass, and geothermal. Companies that promote recycling, natural foods, clean water, clean air, and natural gas are good to invest in. Best gold mutual funds are a good consideration when choosing alternative ways to invest. Gold shares provide securities in companies that are involved in mining, processing, fabricating, and distributing gold, silver, and other resources. Energy and precious metals provides an individual with diversity that has a good chance of experiencing growth.
The promise that wind power provides is that as long as the wind blows there will be usable power. Seeing wind turbines in operation is not uncommon in today's world. They are stationed in places where there is plenty of wind usually on hilltops and wide open places. Alternative energy mutual funds promote this type of power and much more. In addition, electricity can be produced from the sun. Solar power panels have been and are being installed on roofs of buildings, both residential and commercial. Both wind power and solar power do not create pollution or harm the ecosystem. They are earth friendly and are both considered renewable energy. An individual who believes in the smart growth will appreciate the opportunity to invest in a company that has the same goals. A smart investor will prayerfully seek God for guidance when making decisions for the future. "If any of you lack wisdom, let him ask of God, that giveth to all men liberally, and upbraideth not; and it shall be given him" (James 1:5).
Ocean energy is a source of power that harnesses the current and the waves from the ocean. A turbine apparatus is used to produce clean power. Hydropower produces power from dams. Geothermal power is generated from turbines that harness the heat below the surface of the earth. Biomass power harnesses waste gas, ethanol, and bio-diesel by recycling waste and using natural sources to create power. Alternative energy mutual funds are very diverse and earth friendly promoting clean power including renewable sources that come from the environment. A person who chooses to invest in the earth is not only helping their own future generation but the future of all humanity everywhere.
Recycling helps to produce power and resources. Some of these resources are used to create power and are friendly for consumers. Recycling helps the economy, the ecosystem, and consumers. Recycling makes resources renewable and reusable. Preserving trees and keeping endangered wildlife safe is possible through recycling. Investing in companies that promote recycling is possible through alternative energy mutual funds. Companies that produce organically grown and pesticide-free products help to provide consumers with healthy alternatives. Clean water and clear air are also concerns of people everywhere. Investing in companies that promote and work towards clean air and water should be a concern for all. In addition, a person can choose to do other things that help the environment. Purchasing a hybrid vehicle will not only help the air but it will also help to curb the cost of fuel because hybrids use less gasoline.
The growth of precious metals is looking promising in today's world. Many investors believe that the dollar is going to decrease while gold and other precious metals are going to increase. The demand for gold will go up in price because production is not matching consumption. The value of the dollar is likely to decrease because of the budget deficit and uncontrollable spending of the federal government. When the dollar goes down then the value of precious metals will go up. The best gold mutual funds include securities in companies in the gold industry by helping them to continue mining, processing, and distributing natural resources. These types of companies also do research and development in finding the location of natural resources and figuring out ways to secure them.
Shares in precious metals are bought, sold, and exchanged. The funding company keeps track of ownership with best gold mutual funds. Many people prefer buying gold shares over bullion because with bullion there is a need for storage. Shares are usually invested in the securities of companies that deal with precious metals however the fund manager may choose to make other investments that involve risks or are subject to interest rates such as bonds or fixed income. The portfolio of the fund will provide the buyer with the optional investment decisions that can be made by the manager.
Pooling money into one place gives an advantage that equals diversity and better prices. The best gold mutual funds are cost effective simply because investors of mutual funds get better prices than individual shareholders. The investment of precious metals is an alternative type of holding for someone who wants to have a variety of places to save for the future. The confidence factor in the stock market has helped the diversity of mutual funds to become popular. An individual should remember that the reasons for purchasing shares should not be based solely upon past performance. Some people think if shares have done well in the past that they will do so in the future but this is not necessarily true. Instead the decision to purchase a particular portfolio of shares should be because of personal and professional objectives. In addition, smart investing looks to the future including what is going on with technology and what the needs of the future might become.
Fixed Income Mutual FundsWhen considering fixed income mutual funds, an investor should understand how the market works and how to invest his money. A mutual fund is a collection of stocks and bonds managed by a company for the benefit of a number of investors. This means that each person who contributes his money does not need to do all the research and pay the fees necessary for each and every investment he makes. Instead, he entrusts the management company to do that for him. Then the costs of buying the stocks and bonds are spread among all the investors, making each persons costs much less. The same is true for municipal bond mutual funds, which are investments made in city, state, or federal projects such as building highways, schools, sewers, and other utilities.
Fixed income mutual funds and municipal bond mutual funds yield income in three ways. One is through income from dividends on stocks and dividends on bonds. This is relayed to the owners through distribution at certain allocated times. Second, if the securities go up in price, the fund realizes a capital gain,and if the investment is sold, the owner realizes a profit. And third, the entire collection of stocks and bonds may be sold for a profit. Of course, the opposite may be true if the aggregate price of the investments go down. The investor has a choice to either receive a check or to reinvest the money that he earns. One of the advantages of investing this way is that the risk is spread out because the investment is diversified over a large number of stocks and bonds. If one of companies in the fund goes into bankruptcy, the loss is minimized to each investor. But at the same time, the individual has to rely on the management company to make wise choices. Thats why its important to research the track record of the management firm before deciding which to hire. Also, because a great number of stocks and bonds will be traded at one time by this firm, the transaction costs are lower for the individual.
When an individual hires an investment company to represent his financial concerns, the company serves as an investment advisor to provide portfolio management and administrative services. The firm then advises the client on which types of investments to pursue according to his goals and amounts of money he has to invest. In 1940, Congress enacted a law that provides for the registration and regulation of investment companies. In 1970, Congress amended the Act (Investment Company Amendments of 1970) to give standards for management fees, sales commissions, and sales charges. Fixed income mutual funds have a fixed rate of return and therefore have less of a risk than other investments. Municipal bond mutual funds are offered by local, state, and federal governments and sometimes have no taxes assessed to any income gained by the investor. The money collected by these government groups is used to build highways and schools, develop sewer systems, or other public services. Usually, these types of investments can be easily liquefied, or turned into cash at any time. That means that they are short-term securities designed to provide income.
The money market uses short-term debt instruments, mostly Treasury bills, and therefore become a safe place to park investment money. These moneys usually produce a greater return than the interest rates on savings accounts or certificates of deposit, and the investor doesnt have to worry about losing his money as he will with other avenues. Another term for fixed income mutual funds is fixed bonds. Their purpose is to give the individual a steady source of income for retirement or other purposes. Some can pose greater risk than others, especially the ones called junk bonds. And the bonds are subject to the interest rates, which may go up or down. Most investors use a variety of investments to balance the portfolio, including balancing between equity and fixed. Equities are longer term investments that also provide some income. Other characteristics of these investments are sector, regional, or socially-responsible funds. Sector means targeted at a specific sector of the economy such as technology, health, etc. Regional means focusing on a specific area of the world, perhaps Latin America or a particular country. Socially-responsible means investing in companies or organizations that meet certain criteria, such as avoiding money going to tobacco, alcoholic beverages, nuclear power, or weapons.
Some of the biggest problems with these investments are hidden costs. They can eat into the profit or income paid to the individual. A big problem is that the industry hides these costs so that the investor doesnt know he is being assessed fees. There are two types of costs. One is yearly fees to keep the individual invested. The second is transaction fees paid whenever stocks or bonds are bought or sold. This is called loads. The ratio between the ongoing expenses and the profit is called the management expense ratio. Municipal bond mutual funds will also carry a load. The management company will also have administrative expenses, which they may pass on to the client. Some companies are much better at minimizing these costs than others, so that is a good area to research when deciding on which firm to be the representative. The 12B-1 fee is a payment for brokerage commissions and toward advertising and promoting the fund.
When using fixed income mutual funds and municipal bond mutual funds, the investor must take care to handle his money wisely. The Bible advises us, I will behave myself wisely in a perfect way. O when wilt thou come unto me? I will walk within my house with a perfect heart (Psalm 101:2). Even though using a management company will help cut down on the amount of time needed to take care of the investment, the investor must still keep track of his money.