A mutual fund is a way for an investor to have a share in a wide variety of companies for a relatively low capital investment, compared to purchasing individual stocks and shares in a company.
These funds allowed the stock markets to appeal to a wider audience and this has led to many investors making money in a number of different companies.
The popularity of the mutual funds have increased and they are an extremely popular choice in the modern investment portfolio as well as in the markets.
These mutual funds are a managed portfolio; some are more managed than others’ and this will increase the charges that are associated with the fund.
A managed mutual fund
One company, Permanent Portfolio Family of Funds that has developed over a period of 32 years and they have increased the portfolio that they offer to four options. These are different options and they are managed in different ways, this is shown with the returns that they have achieved over the years.
The four different mutual funds that they managed are the Permanent Portfolio, Versatile Bond Portfolio, Short Term Treasury Portfolio and the Aggressive Growth Portfolio.
All these products have had varying success over the long or short term, depending on the mutual funds focus. But some of the best returns have been visible in the Aggressive Growth Portfolio with the returns on this in the last year reaching 42.86%, but an overall ten year return is 8.84%; this is still a healthy return on investment.
These products have all have had variations on the success markets, some have the potential over the long term options where others have managed to provide greater returns over the short term periods.
But what you must remember are the charges, you will need to consider these before investing. A proportion of money will need to be paid in the fees and administration of the mutual fund, the managers don’t work for free and these costs need to be taken into consideration before you sign an agreement for investing your capital with any company.
What your options are
As with all forms of investing, the choices that you make are not guaranteed to bring you great returns and you must never look at the past figures and think that the numbers are going to continue. The stock markets carry risk and it will depend on the risk that you are prepared to take as to the option that is most suited to your needs.
Investing over longer periods is supposed to bring better returns, but again there are no guarantees as to the potential returns you could amass. But if you are looking into investments in mutual funds you need to look at the details to make sure that the investment that you are choosing is the right one for you.
You need to consider the past performance of the investment option, this will give you the basic information, but then you need to consider the area that the investment is focused on, to make sure that these fit with your needs.
You need to feel comfortable with the investment company; do you like their returns that they have made. You need to feel comfortable with the company you invest with, what they can do for you and your money. It will also tell you the minimum amount of money that you will need, with which to invest in the mutual funds.
There is more to investing in mutual funds than just parting with your money and hoping for the best. You need to find the right company and the right mutual fund, one that suits your needs and your budget.