From 1991-2007 I increased my 401K plan over 3,000% using company stock and mutual funds, ETF’s are popular, but are passive, index managed vehicles with subpar gains most of the time and hard to pick if you do not know what sector is hot.
Believe me, I did not earn a fortune in the insurance industry during the 1990’s and mid-2000’s. Religious payroll contribution of 6% did the trick. Plus I was in the hot service sector and my company stock increased 1200% in one case and another 500% in the other when my division was spun off. Sure, lucky me, but the 2000’s brought on a private equity firm buyout of my spun off division and mutual funds were the only game in town: between 2001-2007 I increased my portfolio 11.36% annually with just Fidelity mutual funds in the Mid-Cap Value arena and the Large Cap Value arena.
The next 3-5 years looks good for stocks after we get over this final hump of the recession and the Fed starts to slowly raise interest rates in a timely manner. Company stock should do well and a 25% allocation in a 401K plan would be a prudent choice.
As far as mutual funds, I would go with a mix of Mid-Cap and Large Cap Value…the two areas that take off after a recession as new monies are put to work in R&D at small to medium sized firms and Value stocks in the Large Cap arena are the hottest new thing. Slow and steady investment and dollar cost averaging never hurt anyone, especially the 20 and 30 somethings who have time to over come downturns in the economy.
But you might be saying, why is this 50’s something guy smiling after the Financial Crisis of 2008? Because I was 90% cash since late 2007! After the Dow backed down from 14,000 level, I knew the party was over for a while. One thing all investors should have is a stop in mind for ANY investment be it investment monies or 401K monies.
The market contracts regularly on a 5%-10% correction basis and then snaps back; once the correction hits an 11% or 12% correction, the next move is a 20% correction or greater like we experienced in the Fall of 2008 and the Spring of 2000.
Watch your investments monthly or better yet bi-weekly and have a level when it dips go mainly to cash while being eligible to remain in the mutual funds you are in. Hopefully, your 401K plan is good and matches not only company stock but mutual fund contributions as well.
Become a student of the market! Its hard to do I know with a full-time job and family.
Learn and prosper!
Check out my websites: and . Also look into the following mutual funds: FLPSX, FCNTX, FDVLX and TAVFX for the Value mix I spoke of earlier. These are the funds I was in and the funds that I am still invested.
Steven Kinney is a day trader and internet marketer with various websites: and
What’s in a name? Well, with , the name clearly suggests that it invests in bonds – no question about that. Therefore, if you are thinking of investing in bond mutual funds, then you have to protect your principal loan while paying your income.
This means that you incur more risk whenever you generate the returns but with the bond mutual funds, you get dividends from your interest payment.
Just like with the other mutual funds, bond mutual funds have net asset value or the NAV.
This is the dollar value of your share in the fund and the price that you pay whenever you receive an amount from the buying or selling of your shares in the fund.
Investors opt for bond mutual funds because this means more income for them and a way to diversify their portfolio. Bond mutual funds pay higher dividends compared to savings account and money market.
They are more frequent than the individual bunds as well. When talking risks, bond mutual funds have lower risks and can provide the investor with the stability that he wants and needs in his portfolio.
When the investor has good bond mutual funds, this means that he is stable in the stock market.
But as an investor who is planning to go into bond mutual funds, you should still keep in mind that there are risks involved in this kind of investment. However, this depends on how smart your investments weigh along the stock.
The investments you get from your bond mutual funds may easily be spread out. The key is to not put all your eggs in one basket. In that case, the risk of losing it all is lowered.
Think of bond mutual funds as liquid investments and they flow faster than individual bonds. Shares are sold and bought just like that. But the advantage of this is that these are exempted from taxes – be it state or federal.
There are three kinds of bond mutual funds. These are the US government bond funds, municipal bond funds, and the corporate bond funds.
The returns of these bunds differ depending on the amount of the risks that are inherent in every fund.
If you are going to choose among the three, we suggest that you go for the US bond funds because the inflation rate depends on your debt securities and this is something that you have total control of.
Discover what are the best at my site. Learn where to online.
Do you need money to deal with urgent expenses that have taken place in your life without any information? You need to go with cash till payday loans that are just ideal matches for you. These loans can be availed within a quick span of 24 hours and then, you can enjoy the money for any purpose. are mainly built for the regular employees who are unable to meet all expenses with their small monthly salary.
With the help of cash till payday loans, you can easily solve any kind of small term requirement that can’t be postponed for any other time. Since these loans are unsecured, they arrange you an amount up to 1500 pounds that can be used for a time period ranging from 2 weeks to 4 weeks and it is good for you because you can get rid of your loan debt.
Another wonderful feature of the cash till payday loans is that they are approved without any need of credit check and faxing of documents and thus, everyone can have access to money without going through these formalities. Well, these loans are perfect and easy monetary supports that enable you overcome your all fiscal problems in no times.
Some people are unable to obtain funds through cash till payday loans due to their bad credit score. But these loans end up all these problems because there is no need of checking credit score and as a result, people with arrears, bankruptcy, defaults and other debts can easily obtain money through these loans. Just get ready to gain money and enjoy it cash till payday loans because they are available anytime. You can apply for these loans 24 hours a day and seven days a week.
Charly Groom is associated with Unsecured Business Loans. He is Masters in Business Administration and writes on various finance related topics. To find small business loans, unsecured business loans, short terms business loans, business start up loans visit
In especially volatile economic times, the drive to invest money wisely becomes more poignant. Traditional money-management strategies are examined with hesitation: just because an investment portfolio behaved well once before does not dictate its success in the future. Hindsight has recently taught us that savvy investors need to consider market trends, market volatility and new investment vehicles; they need to recognize excessive risk and the potential for an institution to collect toxic assets. Far from straightforward, an investor’s job has been complicated manyfold by the stress thrust upon the global economy. There are, however, firms that are wisely learning from the mistakes and ill-judgments of the past and developing new investment strategies using non-traditional investment vehicles.
InTrust Advisors, a Florida-based investment boutique, has taken the investment path less traveled. In the early 1990’s, a new type of investment vehicle, exchange-traded funds, or ETFs, was in its infancy. Designed as an alternative to stocks and open-ended mutual funds, an exchange-traded fund is a portfolio of securities, a basket of securities that is tradable like an individual stock on major stock exchanges. Popularity of this new product boomed. In the United States, more than 845 listed ETFs represented over $543 billion in assets as of December 31, 2008. InTrust recognized the potential of exchange-traded funds, harnessed their advantage and applied its own specialized investment strategy to reach client objectives.
The EFT in and of itself offers several advantages, relative to stocks and open-ended mutual funds, to an investment client. First, exchange-traded funds are more tax efficient, operating with fewer taxable events and only being subjected to capital gains tax upon final of the EFT. Second, exchange-traded funds are more liquid, reflecting the liquidity of the underlying securities in the constituent. Thirdly, EFTs are required to maintain a higher level of transparency, fully disclosed all holdings daily. However, not all EFTs are created equal.
InTrust Advisors has developed five unique ETF portfolios designed to be cost and tax efficient, that follow the exclusive InTrust trend following and price momentum models. InTrust’s Market Adaptive Investment Solution (MAPS) is the “special sauce” that capitalizes on the investment power of the exchange-traded fund. This strategy adapts to changes in the market so as to maximize the return on a client’s investment and realize returns faster. Though a market may dip or rise dramatically, InTrust’s MAPS helps retain balance better than traditional “ and hold” strategies.
For high net-worth clients, InTrust Advisors is also pleased to offer customized exchange-traded fund investment solutions. The Personalized Portfolio Solution uses InTrust’s trend following models to actively trade in confirmed bull markets and transfer to cash, gold or treasury exchange-traded funds in confirmed bear markets. InTrust’s research indicates that the discipline of such bear-bull reactive activity can add, annually, nearly 3% to long-term returns.
Born of a multi-client family in 1997, InTrust Advisors continues to be run by its founder and CEO, Jeff Diercks.
For more information on EFTs and MAPS, visit InTrustAdvisors.
InTrust Advisors design a series of cost efficient (ETF) solutions from proprietary trend following and price momentum models. For more information, visit .
Investing your money in mutual funds is a wise move especially for your long term goals. There are different types available in the market. One of these is the income mutual funds whereby the investor gets an income on a monthly or quarterly basis. Other types focus mostly on capital growth instead of this type or they opt for a combination of both. When you want to invest for a long period of time and get a regular income, then this is the option you need to consider. When you invest in this type of fund you get a percentage of its total earnings.
You make an initial investment of a couple of dollars or even less and still enjoy the benefits of owning a part of a large portfolio. Income mutual funds are mostly categorized as either balanced or equity income funds. The balanced type normally tries to balance the investments in stocks and bonds. The income equity funds often concentrate more on dividend paying stocks. Despite the fact that they may both have varying holdings, their main focus is generating and maintaining a high income level and preserving capital.
In comparison to money market or bonds funds, they are considered to be a better investment choice. This is because they produce higher returns than those that you would find in the money market and bond funds.
This type of investment is also considered quite safe as they mostly invest in companies that are creditworthy and established. These companies can be counted onto provide dividends and interest payments.
Mercy Maranga writes content on Finance and Finance Management. Visit her site here for more information on Mutual Funds and how to effectively invest your money.
In these tough economic times it is hard for you to trust a particular type of investment. Luckily, mutual bonds offer some sort of shelter during these times and give you a chance to still make money. However, it is advisable that you take your time when you are choosing the type of mutual fund that will work well for you. Investing in bonds is a good idea and this ensures constant interest payments and possible capital appreciation when the bond prices increase.
Bond mutual funds help you achieve this and much more. The middle risk investment venture that pursue strategies that are supposed to give higher returns. Investing in bonds and debt securities is less risky than stocks. They also provide the stability that many investors are looking for and since they are diversified, there is the reduced risk of default. In addition some bond mutual funds are also federal or state tax exempt. They are also more liquid than bonds since they can be bought easily and sold in smaller units. It is not easy to bonds and hold them since they are not as liquid as bond funds.
There are many different types of bond funds. The government bond funds invest in debt securities that are offered by the government such as treasury bills, treasury bonds, treasury notes etc. Then there are the municipal bond funds that invest in securities issued by the state and/or local governments for doing public works like building bridges, constructing schools etc.
Some of these are exempt from federal taxes since they have the backing of the federal government. The corporate bond funds invest in debt securities of corporations. They are a bit more risky than the other two types as they are not backed by the government. Despite this, they pay out a higher income in comparison to government funds.
Mercy Maranga writes content on Finance and Finance Management. Visit her site here for more information on Mutual Funds and how to effectively invest your money.
It can be difficult sometimes to find a reliable and safe way of investing. This is because many people may not be fully aware of the options that they have available in the market. However, the best thing to do when you decide to invest is to ensure that you are equipped with the necessary and proper facts. It is important that you are fully aware of what your investment option entails so that you do not get any surprises along the way. Mutual funds are a popular investment option and have the advantages of professional management, convenience and liquidity. It is also vital that you understand that mutual funds are not entirely risk free. When you have the proper information, it is easier for you to make an informed decision and compare the different mutual funds so that you can get the right one for you. This will depend on your goals, the length of time you want to invest and your risk tolerance.
It is also essential that you also put funds charges, fees and expenses, the age and size of the fund, the fund’s risk and volatility into consideration. You can also compare funds by measuring them by their returns. This way you will be able to see how much the fund has gained over a certain period of time. The fund’s benchmark is also another way for you to compare mutual funds.
It will provide you with a standard for you to make your assessment. This will help you assess what the fund has made against what it should have earned. It is also advisable that you compare returns. When doing this, ensure that the time period is equal and also the product is similar as far as risk is concerned.
Mercy Maranga writes content on Finance and Finance Management. Visit her site here for more information on Mutual Funds and how to effectively invest your money.
The world’s economy is in turmoil and so is the stock market. This has made investing quite difficult. Among other alternatives, people have been left with the option of investing in mutual funds. Mutual funds 2009 come in various types and the best of these are discussed in this article.
There are various criteria used in selecting these funds. The first is to look at the income-dividends ratio. It is through one’s income that they can know the percentage that their income will yield. The second criterion is the future trends. On should be able to choose funds that will be able to stand the test of time. Here we focus on future gains as opposed to the short term ones.
The last but most important method of selecting funds is to look at the long-term performance. It is important to purchase such investments not based on how they are performing today but by considering how they will be performing in the future. The most realiable mutual funds 2009 have been suggested as follows; The American Century High-Yield Fund: This has higher percentage of dividends of 9% which is higher than others. The New Alternative Fund is another type of fund that one would want to put into consideration.
There is an environmental-friendly way of doing things. It is mainly used by companies that focus on renewable energy. The Franklin Utilities Fund has a dividend yield of 4% and a ten year annualized return of 5%. ING Corporate Leaders Trust Fund is another type of mutual funds 2009 which has 2% dividends. Other types include Vanguard Energy Fund and the Municipal Bond Fund. The investor of this should be careful on the choices they make.
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Mutual funds are one category of investment securities that offer a very wide range of options from which an investor can choose from. This means that, one will be able to spread risk and also increase chances of making more money from the various investment options. The securities that one can under the mutual funds investment category include stocks and bonds. This is what is known as mutual funds diversification.
This means that, with the diversification, there is a great chance for growth and as such, mutual funds are able to balance themselves out, even when the economic times are hard or when the stock market is not doing so well. However, they have their disadvantages as well. Depending on where you invest your money, there is usually no guarantee that you will fetch a good return on your investment.
The reason for this is because, the mutual fund managers are not the same, charges on commissions and other fees differ widely also. The other criteria for mutual funds diversification is the categorization into income and equity funds. Income funds are those that one invests in, purposely for the sake of earning an income. They are more reliable because they are offered by the government and they have a steady dividend return.
Equity funds on the other hand are more growth oriented and they guarantee no return on the investment. However, the more they grow, the more they are likely to fetch, once dividends are declared. Other mutual funds diversification strategies are to be found in other categories like the index funds, the international funds and the sector funds, they all have their specific attributes that make them unique. To get the best out of these investments, keep looking out for any changes and keep your mind open. Also invest in as many categories as possible.
Peter Gitundu Creates Interesting And Thought Provoking Content On Mutual Funds. Read More Of His Articles Here
It is widely accepted that every successful business must have a strong working capital position. It is in this context; an attempt was made to explain the concept and various determinative factors influencing net current assets below:
Gross working capital refers to working capital as the total of current assets. That is to say, Gross working capital = Total current assets. Net working capital refers to working capital as excess of current assets over current liabilities. In other words net working capital refers to current assets financed by long term funds or capital employed of the business.
Accordingly, Net working capital = Current assets – Current liabilities
The net working capital position of the firm is an imperative contemplation, as this will determine the firm’s profitability and risk. Here the profitability refers to profits after expenses and risk refers to the probability that a firm will become technically insolvent where it will be unable to meet obligations when they become due for payment.
A finance manager has to make an appropriate financing mix, which will limit the risk and increase the profitability. Financing mix refers to the proportion of current assets financed by current liabilities and long term funds.
There are two approaches which determine the financing mix (1) Aggressive approach (2) Conservative approach.
According to aggressive approach the long term funds are used to finance only the core or fixed portion of current assets (e.g., minimum level of finished goods inventory, raw material etc) and the other portion i.e. temporary and seasonal requirements are financed by short term funds. This is of high risk and high profit financing mix.
According to conservative approach the total current assets are financed from long term sources and short term sources are used only in emergency situation i.e. when there is an unexpected cash outflow. This is of low-risk and low-profit financing mix.
As we observed two methods of financing mix, one method is of high risk high profit and other is of risk low profit. A finance manager has to trade off between these two extremes.
Operating Cycle:
As there is a time lag between and realization of receivables there is a need for sufficient working capital to deal with the problem which arises due to lack of immediate realization of cash against goods sold. The operating cycle is the length of time required for conversion of non-cash assets into cash. This operating cycle refers to the time taken for the conversion of cash into raw material, raw materials into work-in-progress, work-in-progress into finished goods, finished into receivables into cash and this cycle repeats.
The operating cycle length differs from firm to firm. If a firm has lengthy production process or a firm has liberal credit policy the length of operating cycle will be more. On the other hand, if a firm does not extent credit or the firm is not a manufacturing concern i.e. where cash will be converted into inventory directly then the length of operating cycle will be reduced to a greater extent.
The length of operating cycle is calculated based on the following:
Raw materials storage period (RMSP)
Work in process period (WIPP)
Finished goods storage period (FGP)
Debtors collection period (DCP)
Creditors Payment Period (CPP)
ThereforeLength of operating cycle = 1+2+ 3+4-5
FACTORS INFLUENCING WORKING CAPITAL NEEDS:
A firm should have neither low nor high working capital. Low working capital involves more risk and more returns, high working capital involves less risk and less returns. Risk here refers to technical insolvency while returns refer to increased profits/earnings. The amount of working capital is determined by a wide variety of factors:
Nature of Business: The working capital requirement of a firm depends on the nature of the business. For example, a firm involved in of services rather than manufacturing or a firm is allowing only cash . In the first instance, no investment is required in either raw materials or WIP or finished goods, while in the second occasion there exists no receivable as there is immediate realization of cash. Hence the requirement of working capital will be lower.
2Seasonality of Operations:
If the product of the firm has a seasonal demand like refrigerators, the firms need high working capital in the periods of summer, as the demand for the refrigerators is more and the firm needs low working capital in the periods of winter, as the demand for the product is low.
3. Production Cycle:
The term production cycle refers to the time involved in the manufacture of goods. It covers the time span between the procurement of the raw materials and the completion of the manufacturing process leading to the production of goods. As funds are necessarily tied up during the production cycle, the production cycle has a bearing on the quantum of working capital.
The longer the time span of production cycle, the larger will be the funds tied up and therefore the larger the working capital needed and vice versa.
4.Production Policy:
The quantum of working capital is also determined by production policy. In case of the firms having seasonal demand of the products like refrigerators, air coolers etc. and the production policy of the firm determines the amount of working capital requirement. If the firm has production policy to carry production at a steady level to meet the peak demand, this will result in a large accumulation of finished goods (inventories) during the off-seasons and the abrupt during the peak season. The progressive accumulation of finished goods will naturally require an increasing amount of working capital. If the firm has production policy to produce only when there is a demand then the firm needs low working capital during the slack season and high working capital during season.
5. Credit Policy:
The level of the working capital is also determined by the credit policy, as the firm’s credit policy determines the amount of receivables. If the firm has a liberal credit policy, then the firm needs high working capital and the firm needs low working capital if the company’s credit policy does not allow it to extend credit to the buyers.
6. Market Conditions:
The working capital requirements are also determined by the market conditions. In case of the high degree of competition prevailing in the market the firm has to maintain larger inventories as customers are not inclined to wait for the product. This needs higher working capital requirements. If there is good demand for the product and the competition is weak, a firm can manage with smaller inventory of finished goods, as customers can wait for the product if it is not available in the market.
Thus, a firm can manage with low inventory and will need low working capital requirements.
7.Conditions of Supply:
The availability of raw materials and spares also determine the level of working capital. If there is ready availability of raw materials and spares, a firm can maintain minimum inventory and need less working capital. If the supply of raw materials is unpredictable, then the firm has to acquire stocks as and when they are available for ensuring continuous production.
Thus, the firm needs to maintain larger inventory average and needs larger requirementofworkingcapital.
CONCLUSION:
From the above discussion, it is made clear that the objective of financial management is to maximize the shareholders wealth. Hence, it is needed to generate sufficient profits. The profits generated depend mainly on volume. When the goods are being sold on credit as is the normal practice of business firms today to cope with increased competition the of goods cannot be converted into cash instantly because of time lag between and realization of cash. Further this is possible only through evolving effective working capital policy and better administration on current assets financing.
Dr.R.SRINIVASAN is a Post graduate in commerce and Management. He received his doctoral degree from Alagappa University in 1997. He is now Working as an ASSOCIATE PROFESSORin Post graduate and Research Department of Corporate Secretaryship at Bharathidasan Government College for Women (Autonomous), Pondicherry University, Puducherry.He currently teaches Accounting ,financial management and Research Methodology Subjects. Before Joining BGCW, he was teaching in SNR College, Coimbatore, Sindhi college, Chennai& T.S.Narayanasamy College, Chennai for eight years. He was with the industry for a short term at Salzar Electronics Pvt. Ltd, Coimbatore. He has about 20 years of teaching experience and having research experience of 15 years. His interests are in Accounting and finance, Capital Market, Quantitative Methods. He underwent the Faculty Development Programme at Indian Institute of Management Ahmedabad during 2000-01. He has presented 20 papers in national and international conferences and has published twenty papers in the areas of Finance and Human resource Management in National Journals. Co-authored a book titled, ‘Investors Protection, published by Raj Publications, New Delhi He has delivered lectures in contemporary finance topics at Pondicherry University. He is involved in consultancy projects for Godrej Saralee, Chennai in the areas of Statistical Applications. He has supervised a number of research projects in the area of corporate finance and Human Resource Management. He is the Board of examiner in corporate Secretaryship and Management for the past two decades. .