Dividends are like the golden child's of the stock investment world. If you take a look back at stock history you'll see that dividend stocks are the safest stocks to invest in because not only does the price on them not change much but when they price does change for the worse the change in price is often off set by the dividend income you receive. This makes dividend stocks the ultimate investment tool for investors who want to safely own stocks and getting an income at the same time. If you own a collection of dividend stocks and you continue to build up your portfolio until you retire, during your retirement years you can get a nice large steady income from your stocks to support yourself. And the really good thing about dividend stocks is that you don't have to sell them to get the money you want.

With stocks that don't pay a dividend or don't pay a large enough dividend to be worth investing in for a dividend over the long wrong. These kind of stocks you have to sell in order to get your money from them. And when you sell the stocks the shares are gone and you can't get them back unless you buy more stocks. So your basically uprooting your money making tree without putting down a replacement. The beauty of dividend stocks is that not only does the dividend increase but the stock price also increases and to take your wealth out of the new money being put into the stock that you own you don't have to sell your stock to get profit.

This makes dividend stocks an ideal tool for people who want to live long and prosper and pass their wealth onto their family. Once the transfer of stocks is complete they will continue to pay dividends and grow. And since you don't have to sell them you never have to worry about running out of stocks like you would if you were only investing in stocks with capital gains potential and payments.

Antonio Seegars is the owner of the in-home computer repair company Hampton Roads Pc Repair

Article Source: http://EzineArticles.com/?expert=Antonio_Seegars

It has been written about to the point where investors are tired of hearing it, but it is worth repeating that dividend based investments are going to take on heightened importance and relevance in the future and particularly for 2011. Arguably the biggest reason why investors who need to derive income from their investment portfolios will start turning to dividend paying securities is that these types of income producing securities will not be impacted as much as bonds when rates start to increase.

Interest Rates and Preferred Shares

One of the safest ways to draw an income out of equities is through the purchase of preferred shares. While these types of securities will received a preferred dividend payout compared to common shares, there is also a lot less volatility in price. Still, these securities will deal with yield and whenever yield is involved, interest rate fluctuations will have a counter-corresponding impact on price... albeit much more muted here.

Interest Rates and Common Shares

Unlike preferred shares that will have muted price fluctuations with interest rate increases, common shares will have wider fluctuations. The biggest difference here is that once the immediate "shock" passes, common shares are apt to increase in value as rising rates tell investors that companies are doing well and the economy is seen as expanding. This spells profits and cash flow for companies, which bodes extremely well for their stock price.

The problem with common shares is that their dividends are normally lower than the dividends paid on preferred shares. This leaves the investor more inclined to hold such securities more for their growth attributes than for their income producing abilities.

Preferred or Common for Income

Most investors looking for a way to replace their bond income payments with a security that will not fluctuate as broadly as bonds will once rates start climbing will look to preferred shares. Yields are not only marginally better than they are on common shares (for the most part), but the security price will not move as much.

On the other hand, investors looking to cash in on the growth potential of an economic recovery and expansion can also earn dividend income through many of the common shares that trade on the markets. The trade off is greater volatility and lower income (again for the most part).

Either way, replacing bond income is not so much an issue for many investors, but deciding which way to invest (preferred shares or common shares) is the greater problem to solve. And while this may not seem like such a big problem to work through for 2011 when bonds may suffer market losses, a long-term investment plan needs to look beyond the next twelve months.

Chris has more than 17 years of financial services experience. He currently manages a website about Shipping Crate options at ShippingCrate.org as well as another about investing through Tax Lien List opportunities at TaxLienList.org.

Article Source: http://EzineArticles.com/?expert=Christopher_Fitch

Trading stocks involves buying and selling stocks. Unfortunately, all the hype surrounds the buying side of the stock market. Once you are committed all the sales people seem to disappear.

You see lower lows, you see trend lines breaking, you see volume increasing on the downside, you see negative news, you see insiders selling yet with all the information saying this stock is going down you hang on. Selling stocks is tough.

Perhaps you are a long-term investor and never sell. That is one way to play the game. However, when you are a trader and do not want to become an investor you must sell.

Why do people have such an emotional attachment to a losing stock?

Why can't they sell the loser and use the cash to buy a winner?

I think one of the main reasons traders find it difficult to sell is that from an early age people are trained not to make mistakes. This training happens without most people even realizing it and it begins at home and at school.

At the end of the school year the higher your marks are the happier you are. During the year you may have made some errors however, when it counted you came through and passed your test.

Now think of the reaction a child gets when they come home with a failed grade. Do they get heaps of praise, presents, rewards or do they get ridicule, told to buckle down, privileges taken away or worse. In most cases, my guess is the latter. This is unfortunate as in order to learn people generally fail first and succeed second.

What happens to many is that they get so frustrated about losing that as they grow older they will do anything not to lose and as such end up living a very average life.

You have to understand that trading is a probability game. In order to win you have to play and when you play you will eventually lose. The trick is to lose less than you win.

One of the first rules of trading is to cut your losses and let your winners run.

Let's look at a basic example:

School

90% pass, brilliant
10% fail, stupid

Stocks - 100 trades

90% of trades make $100 (+9,000)
10% of trades lose $1000 (-10,000)

Results in a loss of $1,000

Or

10% of trades make $1000 (+10,000)
90% of trades lose 100$ (-9,000)

Results in you making $1,000 even though you were right just 10% of the time.

This is why you repeatedly hear stock traders say: cut your losses and let your winners run.

This is not an easy job because while teachers and society in general are quick to tell you below 50% is a failure there is very little said about the subconscious mind.

The subconscious mind works on habits. You are programmed from an early age to win. Therefore, selling a losing stock for most people goes against their training whether they realize it or not. Essentially, selling a loser has not become a habit.

However, since most people do not start to play the stock market until they are 20+ years old they have 20+ years of subconscious programming to erase.

To trade well you need to develop the habit of selling your losers quickly and without emotion. Look at the evidence and sell. No remorse, no second guessing just get rid of the position.

Your job is to break this unconscious habit that has been developed over 20+ years. It will take time.

Prior to buying your next stock, identify when to sell your stock and get out of the position. Next, either place a stop loss with your broker or sell the stock when it breaks through your sell zone. In some cases, traders will place a stop loss order as soon as they have purchased a stock.

Move your stop up as the stock advances and never move it down. There will be times that your stop will be hit and the stock will rebound right after that. I have been taken out on the low of the day, it happens. Expect it and live with it. This is why trading is an art not a science.

You cannot control everyone that owns the stock that you own. When someone gets a margin call and chooses to sell a large volume of a stock you own, resulting in your stop being hit, don't take it personal, it is just part of the game.

Over time and a number of trades you will see that the weak stocks are being taken out while the strong stocks continue to advance.

Trading is a probability game. All you can do is put as much probability on your side as you can prior to entering a trade.

Mark trades stocks for fun and profit. To learn the basics of building a stock trading system please visit http://www.knispo-guide-to-stock-trading.com/stock-market-trading-system.html. Find more information on stock trading, stock market screeners and using technical analysis to buy and sell stocks at http://www.knispo-guide-to-stock-trading.com.

Article Source: http://EzineArticles.com/?expert=Mark_Kelly

This is a book on the history of the London Stock Market which goes from 1945 to 2007, it details how the markets stars were made and crushed, many of them turned into success stories while others just faded away.

It gives great examples, such as Jim Slater's, whose card house collapsed which left the Bank of England in a hole and they had to pick up the cards and repack them, then comes the washing machine that blew bubbles by John Bloom and Asil Nadir who made his millions out of oranges. Its gives examples from a range of industries from the recessions, booms and bubbles created throughout the years. Fruit packing, mining, dot com, textiles there all covered in there.

The dot com boom brought it all, how a bull market drives the population in buying shares without thinking, it was a classic. 9 names found their way into the London Stock Market and none survive, they took over the old brewers however it was the brewers who had the last laugh and had you sold your shares in time and got in with the brewers you would have been laughing all the way to the bank while the rest of the world was weeping with dot com loses.

Companies come fly all the way to the sky and suddenly drop, crashing straight on to the ground. Adils orange business was a prime example, Polly Peckers went from nothing to £1.5 million and back to nothing in just a short time of 9 years, the smart ones made money while the pigs got slaughtered.

Visit us to learn more on The London Stock Market

Article Source: http://EzineArticles.com/?expert=Suhaib_Alam

If you see the letters 'DSC' next to a Canadian mutual fund that you own, you can rest assured that you are getting hosed...'DSC' refers to Deferred Sales Charges or fees that an investor has to pay over and above the actual und's management fee.

A deferred sales charge is a "penalty" that the investor has to pay if and when the investor decides to withdraw his/her money. Often it can be as much 6% of the original amount of the investment.

For instance, take an investor who buys $10,000 of a mutual fund with a deferred sales charge. Let's say, the market as a whole does well over the course of a year but this particular fund loses 10%. Not surprisingly, the investor wishes to withdraw his money due to the fund's poor performance. If the investor withdraws his money, he will be hit with a penalty and his investment will be further depleted upon withdrawal. Assuming a 5% penalty on the original investment, the investor is left with $8,500 or a loss of $1,500.

Interesting enough, while the investor winds up with a loss of 15%, the fund company actually does quite well. First, over the course of the year it earns a management fee. In Canada, the average management fee for mutual funds is 2.5-3.0%. So assuming a fee at the low end of 2.5%, the fund company makes $250. It then makes another $500 from the deferred sales charge.

All in, the fund company makes $750. Not a bad pay day for a fund that just underperformed the market.

Of course, the investor could limit his losses by keeping his funds invested with the mutual fund company. In this way, he would save the $500 in deferred sales charge. That would make the fund company very, very happy. Indeed, the fund companies are counting on it. They know that most investors are unlikely to move their investments out if they are forced to pay a penalty.

It really is quite incredible that the big banks are able to get away with this kind of unethical behaviour. In fact, many funds sold by bank financial advisors fall into this category. Unfortunately, the average investor just does not know where to look for pricing information. It certainly is not well publicized by the fund companies for obvious reasons. And unfortunately, our Canadian government has no interest in exposing the mutual fund industry for what it is, unlike Australia or Britain where mutual funds are much better regulated.

The Deferred Sales Charge is just one more way for the Canadian Mutual Fund companies to keep fees hidden from their customers.

Jeff Kaminker Portfolio Manager, CFA, MBA, P.Eng

Jeff Kaminker is a licensed Portfolio Manager for Frontwater Capital based in Toronto, Ontario.

Article Source: http://EzineArticles.com/?expert=Jeff_Kaminker

Without question, there are some disadvantages with mutual funds. They charge management fees that ultimately cut into annual return figures, they invest the way they feel most appropriate without any consideration given to the investor who pays the manager's fees, they can be narrowly focussed, and a few others that are well publicized in the investment industry.

However, mutual funds offer tremendous advantages for the majority of the population. Three of the most overlooked benefits are discussed here and they point to the very fact that mutual funds are, for the most part, an investor's best option.

1. Mutual funds offer tactical investment management. Although many funds will take a buy and hold approach, the securities they own are part of the overall portfolio for a very specific reason. It is rare that a fund manager will purchase a security that he or she feels is a losing proposition. Instead, securities are purchase for their specific appeal, whether it is short-, mid-, or long-term capital growth, income, or a combination of both.

2. Mutual funds provide expertise in niche areas where the investor lacks sufficient knowledge and skill to take positions in individual securities. With asset mix being such an important, vital part of any investor's long-term success with their investment portfolio, it becomes increasingly important to incorporate niche sectors, whether short-term bonds, high yield investments, small-cap equity, foreign equity, and so on. Almost no investor will have professional-level investment knowledge in every asset class and sub-class, requiring them to seek assistance from other professionals. Rather than relying on a rogue neighbor who dabbles in a specific asset for "fun," enlisting the expertise of a highly (often overly) qualified investment manager makes a great deal of sense for the price they cost (often, minimum investment levels are under $2,500) and you usually pay less than 1.5% in expenses.

3. Mutual funds can have specific or general functions depending on an investor's needs. Whether an investor needs a complete investment solution (such as with a target date balanced fund or portfolio) or something on a more specific level (such as filling a gap in their overall asset mix), a mutual fund exists on the market to fill those gaps, and everything in between.

As shown with these three simple examples, there is a mutual fund available to everyone, regardless of his or her immediate and long-term needs. Of course, other options exist but the closest one will find to a mutual fund alternative is an exchange traded fund, which often will not satisfy the investor's long-term and/or specific need.

--> Ten Small Cap Funds Reviewed during month of May at MutualFundSite.org.

Chris has more than 17 years of financial services expertise. He currently manages a website about Used Pallets at ShippingCrate.org.

Article Source: http://EzineArticles.com/?expert=Chris_Blanchet

Many people invest in the stock market without understanding the basics about selection of stocks and how to make money this way. The Penny Stock Prophet system has been invented to help save the investor from losing money by doing the stock picking for the investor. Read on for a full review.

The idea behind Penny Stock Prophet (PSP) is to analyse the stock market with the purpose of targeting good quality stocks trading at a cheap price. Cheap stocks can advantage the investor more than highly-priced stocks as they have more potential for an increase in value provided the underlying fundamentals are sound. An analytical stock picker such as PSP is designed to sift out the low risk quality companies from the cheap but high risk companies. This should mean consistently good trading.

The main benefit behind this system is its programmed ability to determine the stocks that are about to hit a profitable up-cycle. It is based on a similar system to the top investing or trading houses where tracking of real time market data is used to compare the present with trends of the past. This is a commonly used process because stock market trends are always based on recurring cycles of high and low growth.

By tracking past profitable trends by cheaply priced stocks it is possible to find similar indicators with current real time market data. This can enable a fairly precise estimate of how these same stocks are likely to perform in the short-term future.

I have tried this stock tracking system and found that a purchase of cheap stocks trading around 15 to 18 cents have in most cases generated significant capital gains of between 20 and 80 cents a share. Obviously some stocks have done better than others and some have failed to make money but a 75 percent success rate has been impressive.

Another benefit of PSP is that the package comes with a recommended online broker to work in with you the investor. While you naturally need to understand that stock market investing contains risk it is also the best way to make profits quickly on an investment and it is far easier to buy in and out quickly by making a profit than the housing market for example. In fact, many people generate an ongoing income by wisely using this type of system for regular stock trading.

With a one-time fee of $US97.00 http://app-products-info.webs.com and an 8 week 100% money back guarantee this software program is definitely worth trying as a valuable stock market investing tool.

I have a background in business as well as having worked for a boss in various employment from politics to the civil service. I am currently involved in a consultancy where I advise on business start-ups in the renewable energy and building sectors.

Article Source: http://EzineArticles.com/?expert=Anthony_Parker

When you use Stock Investment Software you will get recommendations on which stocks to buy. The next thing you need to know is how to place your trade. Well you will need a stock broker. Making that choice can become confusing. You see their advertisements every few minutes on TV. If you start to check them all out you can get very confused.

One of the things is they offer is premium services. Stock Charts, Stock Patterns, Reviews, Analyst opinions, Stock Patterns etc.

Guess who pays for it. If you bought Stock Investment Software all this work has been done for you. So you have to ask yourself do I need all this? All you need is a reliable stock broker to place your trade. You will find that one of the prime considerations for you is Price. Because you pay when you buy the stock and you pay when you sell it.

Many people fail because of Broker Fees they pay. While when you see the advertised price for example $10.99 a trade verses $5.00 a trade it does not seem significant. But it is. Say you buy shares at $1.00 per share, your cost is $100. Depending on the stock broker you use your fess are 5.00% 0r 10.99%. Today with the unpredictable future people are not buying stock and holding it forever. They trade often. Many are day traders. The more trades the higher the broker fees.

It is wise to play the stock market with Stock Investment Software. But keep your costs down, do not give a large chuck of you profits to the Stock Broker. Watch you Stock Broker fees. Here is another factor you need to consider. When you buy 100 share if you use the $5.00 Stock Broker your fess were 5%, but what percentage would it be if you bought 1000 shares--.005%. So what you should do is never buy or sell less than 500 shares.

My name is Al Villa. I am not a Stock Broker, Analyst, or some kind of guru. I am just a person that has been on the internet since the beginning. What you read here is from my experience. For a long time I did it the hard way. What I have learned in the school of hard knocks I share with you. You can use this or any article any way you choose as long as you share it in its entirety. You can read all my articles all here: More Stock Information

Article Source: http://EzineArticles.com/?expert=Al_Villa

Selling Covered calls is a great strategy to help you create consistent cash flow from the stock market. It can significantly help you to increase the return of just buying and holding.

So what are the advantages?

1. It gives you cash Flow

By selling calls on a stock every month you can create a somewhat consistent cash flow from that stock. Selling options is the only way to create an income from the market that is consistent and covered calls are the safest ways to sell them.

2. Help you During Down Times

If you own a stock and just hold it for the long term, eventually that stock will have a rough time. It is pretty hard to see one of your investments take a dive. But by selling calls on that stock you can recapture some of the losses that occur during a bears market, poor earnings, or just downward pressure.

3. Easy to manage

As far as trading goes covered calls are very easy to manage. All you have to do is sell a call on your stock and wait until expiration day. You do not have to manage the trade by constantly monitoring it and adjusting stops.

It is also a lot less stressful then something like swing trading which can really be hard to handle emotionally at times, especially for new traders.

4. The Returns are pretty Good

There are times when it is possible to get a 5% return or more in a month by selling calls on a stock. It would take a whole year for you to get that kind of cash flow from dividends.

For more on covered calls visit http://www.stocks-simplified.com/covered_calls.html

For some times to avoid selling covered calls visit http://www.stocks-simplified.com/Selling_covered_calls.html

Article Source: http://EzineArticles.com/?expert=Shaun_Rosenberg

After almost two-year bull market, the benchmark Shanghai Composite Index, which tracks both A and B shares, recorded a dismal performance since October 2007. In 2008, The Shanghai Stock Exchange (SSE) suffered an annual loss of over 60%, plunging 2560 points and being the worst performing market in Asia. No doubt, the primary mission of the SSE is to maintain stability in market development. Trading security and smooth operation of the market, the construction of blue chip market, market trading mechanism, product innovation such as the SHSE-SZSE300 Index ETF, and the bond market are among the priorities.

Shanghai, a city historically with deep ties to the western world, has been an international business center, but the Chinese capital market in some ways is still relatively isolated from the international markets. To fulfill China's goal to build Shanghai into an international financial and shipping center by 2020, Shanghai is taking steps to develop more sophisticated investment products, offer favorable tax policies to attract international investors, build a multi-layered financial market system, and promote the opening of financial services in the city. Investors embrace the idea of building Shanghai into an international financial center, which resulted in an instant Shanghai indext's 3.1% increase to 2361.70. One action to note is, for the first time ever, China will allow foreign companies to list in Shanghai. Foreign companies would be allowed to raise money through the Shanghai Stock Exchange and also to issue bonds in China. This could mean new territories for companies that are interested in extending their business to China or Asian markets. As the financial system of the third largest economy opens up and becomes more global, players of the financial world will become more interrelated.

China does not take this route without caution. To nurture start-ups, China has cautiously developed Growth Enterprise Market (GEM), which is an experimental, technology-based, Nasdaq-style stock market. Only more mature firms that have met requirements will be first listed. One can also judge by where GEM is planned to open, possibly in 2009: on the Shenzhen Stock Exchange. Shenzhen has traditionally been a test ground for new programs before they were rolled out to the broader market. Investors are cautious but remain interested, with vivid memories of the 2006/2007 SSE's over 300% gain as well as more than $3 trillion of loss in value from listed companies during the downturn; and it all happened when the Chinese economy still had a growth of 9% in 2008.

A growth of about 8% is widely expected. Investors keep a close eye on companies like Baidu (BIDU), China Mobile Ltd. (CHL), and both recently posted strong quarterly growth with warnings. Baidu reported a better-than-expected 23.5% increase in first-quarter net profits, but warned the global downturn was affecting online advertising including paid search listings, keywords, and ads on Baidu's pages. Holding over 60% of China's online search market share, Baidu, however, faces competitions from Google. China Mobile had a 5.2% first-quarter net profit increase, but warned about its slowing subscriber growth. On April 23, Baidu, the China search engine giant, has a market capitalization of 7.2 billion and a P/E ratio of 47.5x, and China Mobile, China's largest provider of mobile telecom services, 179 billion and a P/E ratio of 11x, although P/E multiples may not be as reliable in a downtime if forecasted earnings is used. In the territory of wireless technology, China's Ministry of Industry and Information Technology estimates that 170 billion yuan, or about $25 billion, will be spent on 3G networks in China in 2009. In 2009, China Mobile, will spend around 58.8 billion yuan, or US$8.6 billion in 2009 to build out its 3G network, while China Unicom (CHU) and China Telecom (CHA) will spend around 30 billion yuan, or US$4.4 billion each on building 3G networks. Two companies that are worth mentioning are Huawei and ZTE, which are winning contracts as China rolls out its 3G wireless technology, taking more market shares from their foreign competitors.

China's fiscal $586 billion stimulus and its planned spending of a third of the stimulus on railways, highways and power grids-related projects tends to benefit companies like China Zhongwang Holdings Ltd., Asia's largest aluminum-extrusion manufacturer by capacity, which has a railway compoent in its business and is promoting its IPO. Foreign investors are welcome in this market especially as joint-venture partners. China's government spending on infrastructure will certainly have an impact on some international players.

For information on business resources, stocks, real estate, business travel, culture and entertainment in Shanghai as well as shopping for Shanghai, China, or Asia related products and services, please visit http://shanghaipinnacle.com/

Article Source: http://EzineArticles.com/?expert=Bilu_Manzella

Mutual funds are the average or inexperienced investor's best friend. They are designed for every-day people who want help from professionals in managing their investments. To get technical, they are "open-end investment companies" that pool investors' money and manage it for them.

Investing in mutual funds is quite simple. Tens of millions of Americans trust their money to these investor-friendly investments. Let's take a look at how investing in mutual funds works.

Jack has a $10,000 CD maturing at the bank in a joint account with his spouse. He also wants to start investing about $5000 a year in a Roth IRA. He is looking to earn more interest on his CD, and wants more investment options for his IRA than his bank offers.

Jack does not really know how to invest his money, so he asks his old friend Jim for advice because he knows that Jim is an experienced investor. Plus, Jack is thrifty and does not trust salesmen, and that includes those who charge you to invest with them.

Jim suggests mutual funds with a major no-load fund family that he does business with. Jim knows how to invest, and helps Jack with the mutual fund applications. This required two different applications. The first was to open a joint account with the $10,000 CD money. The second was to open a Roth IRA.

The $10,000 was spit evenly with half going to a high-quality bond fund, and half to a money market fund. They did this because Jack wanted safety, but also wanted to earn higher interest than he could get at the bank. Jack would not receive the interest income the funds paid in dividends, but decided to have it automatically reinvested to buy more shares, so his investment would grow.

They opened a Roth IRA and set things up so that $400 a month would automatically flow from Jack's checking account to the IRA with the mutual fund company. Half would go to a balanced fund that invested in both stocks and bonds, and half to a money market fund. Once again, all dividends (and capital gains) would automatically be reinvested to buy more shares.

Jack wanted growth, but Jim knew him very well. Jack did not know how to invest, he was cost conscious, and he avoided risk whenever possible. That's why Jim had half of Jack's money going into money market funds. These funds pay competitive interest rates in the form of dividends. If interest rates in the economy change, the rate paid by money market funds change in step. Plus, they have a great record for low risk and high safety.

For now, Jack is happy, especially since all of this cost him nothing in sales charges or fees. For example, he sent the fund company $10,000. All of his money was invested to buy shares, with no sales charges. Plus, he has $400 a month going into funds in his Roth IRA. Once again, all of the $400 is going to work to buy shares, with no sales charges or fees.

The only cost to Jack is yearly expenses. Every mutual fund takes these costs directly from fund assets. Jack wouldn't even know this if Jim hadn't told him. On the other hand, Jack's expenses were very low compared to most funds.

Jim explained to Jack that on average, his yearly expenses for the type of funds he was in would amount to almost 1% a year with most mutual fund companies. Jack was paying about one-fourth of that, which put a smile on his face.

A retired financial planner, James Leitz has an MBA (finance) and 35 years of investing experience. For 20 years he advised individual investors, working directly with them helping them to reach their financial goals.

Jim is the author of a complete investor guide, Invest Informed, designed for average investors or would-be investors of all levels of financial background and experience. To learn more about investments and investing and his new financial guide go to http://www.investinformed.com

Article Source: http://EzineArticles.com/?expert=James_Leitz

What is the best way to invest $10,000? If this is something that you really want to know, know that there are plenty of ways in which you can invest this money. First, you have to determine how long you want to sit on this money. When do you want to see a return? You know that the faster you want to see a return the higher the risk that you are dealing with.

So let's say you want to sit on this money for 5 years. You can take your money and put it in a growth stock mutual fund. These may include international, aggressive growth, stable, etc. There are several different kinds. You just have to make sure that what you are investing in are stock mutual funds. Now, if you can't leave your money alone for a period of 5 years, then you may need to consider a CD or a bond.

But if you do plan on leaving it alone and you plan on investing in growth stock mutual funds, you will find that the risk to return ratio is quite amazing. You could make more in individual stocks, but you have to determine if the risk is worth it. But with stock mutual funds, the risk to return ratio is what you want to focus on. In the end, you may net more money due to the fact that the risk is lower.

So if you're wondering how to invest your money, this is a great way to go about that. So go ahead and invest and have a great time doing it. You might be quite pleased.

If you need money now, like I mean in the next hour, try what I did. I am making more money now than in my old business and you can too, read the amazing, true story, in the link below. When I joined I was skeptical for just ten seconds before I realized what this was. I was smiling from ear to ear and you will too.

Imagine doubling your money every week with no or little risk! To discover a verified list of Million Dollar Corporations offering you their products at 75% commission to you. Click the link below to learn HOW you will begin compounding your capital towards your first Million Dollars at the easy corporate money program.

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Article Source: http://EzineArticles.com/?expert=Perry_Webbing

I've been looking at a couple of growth funds, as well as some no-load funds to get started. Since I don't have a lot of capital to invest at the beginning here, I figured that these types of funds would be my best bet. They'll allow me to diversify my portfolio to an extent that wouldn't be possible if I simply bought stocks on my own, and this will of course protect me from short-term market fluctuations. By using mutual fund ratings to identify good investment opportunities, I'm giving myself an excellent head start.

Mutual fund reviews can come from a variety of sources, including financial journals, investment magazines, and the Internet. Since I don't have much experience with the stock market, I've been sticking to trusted names for my information, such as The Wall Street Journal, Forbes, Fortune, Kiplinger's Personal Finance, and Money. All of these publications regularly feature comprehensive mutual fund ratings, and I can even access recent archives by visiting their respective websites.

I've also found a number of independent websites that publish their own ratings, but I'm a lot more wary of following any advice from these places. After all, sometimes it's hard to tell if a particular site is part of a class project for a 19-year-old college student or if it's actually run by people who know what they're doing. The last thing I need is to follow terrible advice and lose all my money!

I know that fund ratings are only the beginning, and even funds that score the highest in these reviews carry a certain amount of risk. But by reading as much as I can about these investments before putting my money in, I'll be in a better position to assess the risk vs. reward ratio and will be able to make smarter decisions that will hopefully pay off in the form of a nice, big retirement account that will sustain me through my golden years.

If you're in the same boat and want to start planning for a secure future, I recommend that you review fund ratings from trusted sources before you invest your hard-earned dollars. The extra research will be worth it!

Chris Jonas is a chef working in Soho, New York.

Check out these great Mutual Fund reviews and articles or the more specific Mutual Funds Comparisons articles and resources.

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First off, why should you invest in mutual funds? Mutual funds are helpful for those who have limited time and resources, and would prefer to leave the management of their money to someone else. Mutual fund managers offer the expertise to invest in highly specialized areas such as international equities, and may thus be attractive if you would like to gain exposure to these markets without having to do the legwork yourself.

With such a wide array of mutual funds, choosing among them can be difficult. Nonetheless, there are three major criteria you should use to evaluate any mutual fund: the mutual fund's investment objectives, investment track record, and the mutual fund's expenses.

Mutual Fund Objectives

Choose mutual funds based on whether you are comfortable with their investment objectives. Different mutual funds have different investment objectives: growth, value, income, international exposure, contrarian investing. These will dictate the type of strategies followed by the fund - are the fund managers value investors? Or do they invest primarily for growth? Other funds adopt a strictly contrarian approach.

Extreme investment objectives naturally lead to more risky investment strategies - these are specifically the type of mutual funds you should be careful about investing in.

One indicator you should become familiar with is the Sharpe ratio. The Sharpe Ratio compares performance to fund volatility and is a good measure of risk. The lower the ratio, the better. The Sharpe Ratio is a very important measure of the level of risk you would expose yourself to.

Mutual Fund Performance

While past performance does not necessarily imply future success, it is nonetheless an important indicator. Compare the mutual fund's performance to the overall market and sector performance. Note that more than 70 percent of all mutual funds underperform, so scrutinize the performance figures carefully. What is the time span, what did the fund compare itself against, and what is the mode of comparison?

Mutual Fund Expenses
The third major factor you should carefully evaluate is the mutual fund's expenses. Look at the expense ratio. This ratio sums up all the costs of investing in the fund, which typically include the management costs, 12-b-1-, operating costs, loads and other miscellaneous costs.

For specific information on each mutual fund and to retrieve the different ratios mentioned above, Yahoo Finance and Morningstar are my personal favorites.

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It seems a little odd to compare stocks to mutual funds. Actually, mutual funds are largely composed of stocks. It is important to make the distinction between the two as there are some very real advantages to using mutual funds.

It is fun to invest in individual stocks because each company has its own story to tell. However, you want to focus on making money! Investing is not a game and should not be taken lightly.

When you invest in mutual funds, you are able to diversify and reduce your risk of losing money. Do you think that those wealthy investors out there just put their money in a couple of stocks? No! Either they are investing in mutual funds or are buying large numbers of stocks.

When you purchase mutual funds, you are hiring a professional manager at a relatively inexpensive price. It would be a little off the wall to think that you have more knowledge than a mutual fund manager! Most managers have been around the track a number of times and have the academic credentials to back up their knowledge.

Mutual fund companies have the advantage of capitalizing on economies of scale because they pool investors’ monies together. Since these companies have large amounts of money to invest, they usually have personal contacts at many brokerage firms and often trade commission-free.

Mutual funds are easy to take care of. The bookkeeper is much more challenged when there are hundreds of stocks to keep track of!

Mutual funds are very liquid. Put in your order for money in the morning if you are short on cash, and by the time the market closes you may have a check waiting for you. Stocks, on the other hand, are much more difficult. It all depends upon what you have invested in. CDs are not at all liquid and bonds are difficult as well.

If you are new to investing then mutual funds may be the way to go. You can invest small increments of money at regular intervals and not have to pay a trading cost. If you invest in stocks, you will find that they carry high transaction fees. This makes it quite difficult for the small investor to realize a profit.

If you are a wealthy stock investor, then you have it made because you get preferential treatment from the brokers. Wealthy bank account holders usually get the red carpet treatment from the banks. However, mutual funds do not discriminate. Whether you only have a paltry $50 or a huge sum of $500,000, you all get the same manager, the same investment and the same account access.

Generally speaking, mutual funds have a much lower risk than stocks. This is largely to diversification which was mentioned earlier. With stocks, there is always the worry that the company you are investing in will go belly up! With mutual funds, that is next to impossible.

As you can see, there are many advantages in investing in mutual funds over stocks. It is not to be said that you should never invest in stocks, but if you are just getting your feet wet with investing it would be best to go with mutual funds!

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Comparison between Mutual Funds and Stocks

Diversification

Mutual fund companies invest in a variety of stocks, bonds, and money-market investments, so mutual funds carry much lower risk than stocks.

Professional Management

Mutual funds enable investors to pool their money and place it under professional investment management. These managers have been around the industry for a long time and have the academic credentials to back it up.

Greater Upside Potential

Individual stocks have a greater upside potential than most mutual funds. Fluctuation in stocks is greater than mutual funds, so you have greater chance to earn more return.

Risk and Return

In general, Risk and return depend each other, the greater the risk, the higher the potential return; the lower the risk, the lower the expected return. Mutual funds try to reduce their risk by investing in a diversified group of individual stocks, bonds, or other securities.

Efficiency

Mutual funds have large sums of money to invest and often they trade commission-free and have personal contacts at the brokerage firms.

Conclusion

By investing in stocks you can get more return than mutual funds but, by investing in mutual funds your risk is lower. Mutual funds are great for funding retirement plans and investors that don't have the time or energy to consider individual stocks.

It is noticeable that most expert traders in stock market invest in mutual funds too. I recommend investing in both of mutual funds and stocks but, if you have experience, time and energy you can invest most of your money in individual stocks.

By Mostafa Soleimanzadeh. Investing in the Stock Market Tips, Learn how to Invest in Mutul Funds.

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Mutual funds simply are a method through which people invest. People often asking, "What are mutual funds paying?" The truth is that mutual funds don't pay anything! People also say, "I don't like mutual funds because they're risky." But there's no such thing as a "risky" fund. Nor has anyone ever lost money in a mutual fund. Mutual funds are not good, and they're not bad.
A mutual fund, in fact, is merely a mirror - a reflection of something else. Thus, if you invest in a mutual fund that invests in stocks, and you are as likely to make money or lose money as any other person who invests in stocks.
In fact, you can use mutual funds to buy virtually any kind of investment: stocks, bonds, government securities, real estate, gold and other precious metals, international securities, foreign currencies, natural resources, even hedge positions and money markets. You can find funds that engage in virtually any type of trading activity, including options and futures contracts, derivatives, and even selling short.
Technically, mutual funds are called "open-end" investment companies because they forever buy and sell their shares. In industry jargon, mutual funds "sell" shares to the public, and when you want your money back, the fund will "redeem" them for you.


About the author: Tony Reed is the author of " Mutual funds are not investments", please visit his website Mutual Funds & Stock Trading for more information.

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