International Mutual Funds
International mutual funds consist of Global, Foreign, Country Specific, and Emerging Markets. Investments in global funds are both local and International. Foreign focuses on shares in other countries. Country Specific focuses primarily on one region or country of the world. Emerging markets focuses on small developing countries and are considered somewhat risky because the value is dependent upon growth. Small cap mutual funds are investments in new companies who are mostly using share profits to grow and expand. New or emerging companies have a lower market value than large or mid-size companies. Larger and higher market value company shares are known as large-cap and mid-size company shares are known as mid-cap shares. Any investment should be done prayerfully and thoughtfully. The first thing an investor should do is to learn about the stock market and in the different types of investments available. As Christians, the goal should not be to get rich but to be blessed to bless others. In addition, Christians should be willing to invest in spreading the gospel of Jesus Christ and to provide for their own households. "The blessing of the LORD, it maketh rich, and He addeth no sorrow with it" (Proverbs 10:22).
Trying to decide on how to invest with mutual funds can be time consuming because there are so many to choose from. The three main types are money market, bond, and stocks. The safest are money-market and treasury-bill shares. Usually these shares are worth a couple of percentage points more than the typical interest income from a savings account. Fixed-income shares are investments that include treasury bills, bonds, and mortgages. These shares usually provide income and sometimes capital gains. International mutual funds offer some of the same investment objectives as other types of shares but they are opportunities to invest globally instead of just locally.
Some investors want diversity with their investments because they feel doing so is safe. For the individual who wants diversity, choosing balanced shares will provide a mixture of common stock, preferred shares, bonds, and cash. Special equity shares are investments in real estate and precious metals. Global and International mutual funds invest in money-market securities, bonds, and stocks in various countries. If a market or country is not doing well there are many others to choose from that may be doing really well. Always consider the level of risk with any investment and find out exactly what the objectives are with any chosen investment.
Different objectives with investments usually include a specific goal that leads to income, growth, and capital. A company or country may have the main objective of providing shareholders with additional income. These shares are usually from investments of equity securities that increase a company's assets and provide the investor with long-term capital gains. The main thing to remember is to be thoughtful about investments and never just randomly pick shares. Small cap mutual funds may not seem attractive to thoughtful investors because they are generally shares in new emerging companies that have no past financial history. However, the knowledge of this does not necessarily mean anything. Some new companies have had tremendous success very quickly and investing in some of them has made some people very wealthy in monetary gain.
An individual who purchases shares in any type of market needs to understand some of the variables involved when it comes to trading or selling shares. Any reinvested distributions are subject to tax. In other words, any profits or gains received from trading are taxed. Keeping good records is important for any investor. Statements from investments should be kept in a safe place whether it is for small cap mutual funds or from International shares. The tax aspect of investments can be complex. The amount of tax due will depend on the type of income earned. Some people think if they reinvest immediately that they won't have to pay taxes on proceeds or distributions but this is not true because this is considered income received.
Bond shares and mortgage shares usually provide income payments to investors. The main thing to remember with International mutual funds that are in the form of bonds and mortgages is that when interest rates go up the value of bonds and mortgage shares go down and vice versa. One risk associated with bonds is the possibility that the issuer fails to make interest payments on time. Mortgage shares are usually guaranteed by the government and they are less volatile than bond shares due to shorter maturity dates. However, mortgages on industrial or commercial property can have longer maturity dates. A maturity date is simply the date that the bond issuer pays the original principle amount that was borrowed to the shareholder or bondholder.
Buying into equity funds spells diversity because each share signifies ownership in not just one company but in various companies. In other words, a share buys investments in several different companies. The hope is that if one company becomes a risk hopefully the others will prove to be profitable. Small cap mutual funds that are invested in equity funds would generally be several companies that are emerging grouped together in one share. This is a lower risk than investing in just one company that is new on the public scene because the investor hopes that if one fails the other companies will hopefully expand and grow and yield an increase. The volatility of the stock market can affect the returns on equity shares. Equity shares are investments in stocks which are made up of assets of Corporations and are less risky in the long-term compared with the short-term.
Real Estate Mutual FundsWhen an investor wants real estate mutual funds, he can locate tens of sources that offer to help the investment. Service management companies connect investors' money with purchases of stocks or bonds. Their expertise provides more efficiency in investing and a more experienced management team that gives diversification, expert stocks and bonds selection, lower costs, and convenience for the investor. Management companies can help the individual select funds or they can assist brokers, advisors, and financial analysts help their clients. The most common type of investment, the open-end fund, allows individuals to buy and sell stock on an ongoing basis. The information provided on company websites can include fund returns--for the current year or for three to five years; the loads, which includes the front-end commissions or surcharges; expense ratios and fees; and ratings. By comparing the profits and expenses, the consumer can select the lowest expense mutual funds. The experts will also provide fund rankings to give clients more information on making wise investments.
This is how the process works. The company issues shares of stock in exchange for cash. In this way, investors who buy become part owners of the fund itself. The fund uses the cash to purchase securities, such as stocks and bonds. The salesman who handles the purchases is called a broker. Most investments have ratings. Some investments are not rated because they are so new, but the ones with high ratings will have four or five stars. Some people like to buy unrated investments because they feel they will provide superior returns. Other people believe highly rated investments have more secure returns. But the wise money manager remembers that the past performance of a stock or bond is no guarantee of how it will perform in the future, but is an important fact to consider since it is a track record. These ratings are ranked by one-year returns and include year-to-date returns along with three and five year returns if available. For the top groupings, different time periods will be provided.
Another fact to consider is how often the stock has been sold and bought. This statistic may show that these real estate mutual funds have a greater proportion of capital gains taxes, which causes to stocks to be sold more often. All are listed by expense ratios and include other fees as well. With this information, the investor can narrow his search for the lowest expense mutual funds. Some people look for no-load funds. A load is the service charge assessed to the fund. A no-load has no service charges. Usually, an investor deals with a no-load fund on his own, but one with a load has a representative who helps in the buying and selling. When loads are added into the price, it is called an offering price. Other lists show the investments with and without 12b-1 fees. The investor can also check Daily Updates to find current prices. Good service companies offer detailed reports that show names, annual price ranges, daily prices, news about the market, and profiles of different investments. Reports can give summary tables that tell the market symbols for each fund. The group offering the information will ask the applicant to become a member so that it can provide quality facts to help in making good buying decisions. The objectives of these groups are to provide resources for publicly traded stocks and mutual funds, to give analytical tools and commentary to aid the investor, and to give professionals more knowledge and highlight business opportunities.
When selecting a real estate mutual funds service to help in investing, a person should look for a group that helps the investor select from investment trusts, operation companies, and other property types or industries. The investor can get help in finding links to get updated information such as stock prices, articles, and features, along with analytical tools. Along with ratings on companies, contact information should also be available to make it easier to get on-the-minute statistics about publicly traded companies such as annual or quarterly reports, press releases, and registration statements. The investment service should also provide profiles on how it conducts its own business so that the client can make wise decisions about which service to hire.
To determine the value of the shares, the accounting staff adds up the value of all the securities in the portfolio, adds in other assets, deducts liabilities, to get an overall value. To get the value of a share, the net assets are divided by the number of outstanding shares. This is called the net asset value. This is the price at which shares of the fund are bought and sold. An investor can find the net asset value listed in many newspapers. Therefore, the investor can easily find the lowest expense mutual funds to buy.
After the individual has decided which real estate mutual funds he wants to invest in, he sends for a prospectus and an application. The prospectus is a booklet that describes the investment. Once the investor buys some shares, the fund will issue periodic statements detailing all transactions, including purchases, sales, and dividends. When a fund is located in a specified industry or area, such as real estate, it is called a sector fund. An advantage in selecting a certain sector is that the individual can find brokers who have expertise in this area and can advise him about the lowest expense mutual funds and the ones that have proven high profits. Yet no broker can guarantee profits. As believers, we need to put our trust in God rather than in our ability to invest. Proverbs 3:5 says, Trust in the Lord with all thine heart; and lean not unto thine own understanding. No matter what the markets do, trusting in the Lord will bring peace of heart and mind.