Top Mutual Fund Questions to be Asking

(Author: Wayne Ouellette Sr | Article Views: 11 | Word Count: 509 | Published: May 20th 2008)

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By M. L. Williams - There are many frequent questions that are common about mutual funds. This is probably because mutual funds are so popular these days that many people are already investing in funds or are at least thinking about it. Below are some questions and answers:

Top Mutual Fund Questions Of 2008 - What Is The History Of Mutual Funds?

The very first mutual fund was formed in the Netherlands in the early 1800s. Back then, a mutual fund was known as an investment trust. The first mutual fund formed in the U.S. was the New York Stock Trust in 1889. Because at that time Boston was considered by many to be the financial center of our nation until the turn of the century, a majority of funds started there: Fidelity, Pioneer, and Putnum Fund, to name a few. In 1928 the Wellington Fund was established and was made up of both stocks and bonds.

How Do IRAs Relate to Mutual Funds?

In 1975, a provision was added to the Internal Revenue Code that allowed individuals already in a corporate pension fund to contribute up to $2,000 per year to a Individual Retirement Account. This was by far and away the largest contributing factor contributing to the growth of mutual funds over the last 33 years.

Top Mutual Fund Questions Of 2008 - What Is A No-Load Fund?

A "load" is a sales fee charged when you buy or sell a mutual fund - the fee is charged by the mutual fund company. A no load fund is one that does not carry such a sales fee.

What Exactly is a Mutual Fund?

A mutual fund is simply a financial intermediary that allows a group of investors to pool their money together with a predetermined investment objective. The mutual fund will have a fund manager who is responsible for investing the pooled money into specific securities. When you invest in a mutual fund, you are buying shares of the mutual fund and thus you become a shareholder of the fund.

Index Funds - What Are They?

This type of fund tracks one of the stock market indexes, whether it is the Standard & Poor's 500 Stock Index, the entire stock market index, or some other performance measure of a like group of stocks. Most investors are probably best off in the long run buying an Index Fund.

Top Mutual Fund Questions Of 2008 - What Is Net Asset Value?

For most of the funds, the NAV is determined daily, after the close of trading on some specified financial exchange, but some funds update their NAV multiple times during the trading day.

Top Mutual Fund Questions Of 2008 - What Is A Public Offering Price?

Closed-end funds may trade at a higher or lower price than their NAV; this is known as a premium or discount, respectively. If a fund is divided into multiple classes of shares, each class will typically have its own NAV, reflecting differences in fees and expenses paid by different classes. A Public Offering Price (POP) is nothing more than the net asset value plus a sales commission.

About the Author

M. L. Williams - Discover more about personal finance, wealth accumulation, internet stock trading and earning income through investing at stock trading, a site with an abundance of knowledge about stock trading and wealth accumulation.

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