FIN 101- week 11
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This 2 page Class Notes was uploaded by Rachel Rusnak on Wednesday May 11, 2016. The Class Notes belongs to FIN 101 at Ball State University taught by Professor Boylan in Summer 2015. Since its upload, it has received 10 views. For similar materials see Personal Finance for Fiscal Wellness in Finance at Ball State University.
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Date Created: 05/11/16
Personal Finance 101 Professor Boylan 1 Chapter 11: Investing in Mutual Funds. ***on the test*** 1. Mutual Funds Basics. a. Fundamentals and structure of mutual funds. i. Diversification of holdings. ii. Reinvestments deposits and payments. iii. Retirement accounts. iv. Mutual funds are transparent. v. Net asset value. vi. Buying and selling mutual funds. vii. Tax consequences. 2. Creating an Investment Objective. a. Have an investment objective. Once that is ex=stablished you can pick investments. i. Desires profit/ return. ii. Amount you can invest. iii. Amount you are willing to lose. iv. Time Horizon. v. Tolerance of risk. vi. Where you plan to get help picking investments. 3. What is A Mutual Fund? a. “A set of fuds raised from the public and managed by the Investment Fraud Manager (via portfolio). 4. How Big is the Mutual Fund Market. a. $23 trillion (in 8,5oo funds) or… b. $22,964,267,000,000 5. The Mutual Fund Concept. a. Pooled diversification. i. Investors buy into a diversified portfolio securities for the collective benefit of individual investors. 6. Mutual Fund Expense. a. Load= sales commission. b. Front-end load= commission when shares are purchased. c. Back-end load= commission when shares are sold. d. Low-load funds= 2-3% commission when shares are purchased. e. No load commission= no load is ever paid for on these funds. 7. How do I Start Investing in Mutual Funds? a. Find the right type of mutual funds. b. Consider taxes. c. Buy a mutual fund. 8. Exchange Traded Funds (ETFs) Basics. a. Fundamentals. i. A security that tricks an index, a commodity or a basket of assets like an index fund, but trades like a stock on an exchange. b. Market price. c. Buying and selling EFTs. d. Tax consequences. 9. Types of EFTs. a. What is a Spider? Personal Finance 101 Professor Boylan 2 i. Spiders (SPDR) are used by large institutions and traders as bets on the overall direction of the market. ii. They are also used by individual investors who believe in passive management. iii. Compete directly with S&P index funds. b. What is a Diamond? i. Diamonds are used by large institutions and traders as bets on the overall direction of the market. ii. They are also used by individual investors who believe in passive management. iii. Compete directly with DJIA index funds. c. What is a Qube? i. Qubes are used by large institutions and traders as bets on the overall direction of the market. ii. They are also used by individual investors who believe in passive management. iii. Complete directly with NASDAC 100 index. 10. Fast, Cheap, Efficient. a. Types of ETFs. i. Market index ETFs. ii. Market ETFs. iii. Sector ETFs. 11. Finding Good ETFs. a. Matching ETFs to objectives. b. Using ETFs to diversify. i. Our generation doesn’t want to spend the money on expediential funds= growth. 12. American Stock Exchange (AMEX)- where ETFs are Traded. a. Located at 86 Trinity Place, New York City (Financial District). b. The third largest stock exchange in the U.S. after the NYSE and the NASDAQ. c. Has the least strict listing requirement. 13. Other Kinds of Funds. a. Close end funds. b. Unit investment trusts- definite timeframe.
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