The number of people who choose working FSBO has increased greatly. The main reason for this is that selling your home online can really save you a substantial sum of money. At first blush 6% may not sound like much. But imagine that if the average price of a house is about $300,000 this means that the seller will have to pay nearly $18,000 to a broker. In reality you can save this money by marketing your property directly to the consumer using online services, for example like this one: http://www.fizber.com/sale-by-owner-home-services/service-providers-search.htm
Monday, March 3, 2008
Tuesday, December 26, 2006
COMMON STOCK FUNDS
Apart from the money market funds, common stock funds make up the largest and most important fund group. Some common stock funds take more risk and some take less, and there is a wide range of funds available to meet the needs of different investors.
When you see funds "classified by objective", the classifications are really according to the risk of the investments selected, though the word "risk" doesn't appear in the headings. "Aggressive growth" or "maximum capital gain" funds are those that take the greatest risks in pursuit of maximum growth. "Growth" or "long-term growth" funds may be a shade lower on the risk scale. "Growth-income" funds are generally considered middle-of-the-road. There are also common stock "income" funds, which try for some growth as well as income, but stay on the conservative side by investing mainly in established companies that pay sizable dividends to their owners. These are also termed "equity income" funds, and the best of them have achieved excellent growth records.
Some common stock funds concentrate their investments in particular industries or sectors of the economy. There are funds that invest in energy or natural resource stocks; several that invest in gold-mining stocks, others that specialize in technology, health care, and other fields. Formation of this type of specialized or "sector" fund has been on the increase.
There are several types of mutual funds other than the money market funds and common stock funds. There are a large number of bond funds, investing in various assortments of corporate and government bonds that invest in growing companies (like software development). There are tax-exempt bond funds, both long-term and shorter-term, for the high-bracket investor There are "balanced" funds which maintain portfolios including both stocks and bonds, with the objective of reducing risk And there are specialized funds which invest in options, foreign securities, etc.
LOAD VS. NO-LOAD
There are "load" mutual funds and "no-load" funds. A load fund is bought through a broker or salesperson who helps you with your selection and charges a commission ("load")—typically (but not always) 8.5% of the total amount you invest. This means that only 91.5% of the money you invest is actually applied to buy shares in the pool. You choose a no-load fund yourself without the help of a broker or salesperson, but 100% of your investment dollars go into the pool for your account.
Which are better—load or no-load funds? That really depends on how much time and effort you want to devote to fund selection and supervision of your investment. Some people do not have neither the time, inclination nor may aptitude to devote to the task— for them, a load fund be the answer. The load may be well justified by long-term results if your broker or salesperson helps you invest in a fund that performs outstandingly well.
In recent years, some successful funds that were previously no-load have introduced small sales charges of 2% or 3%. Often, these "low-load" funds are still grouped together with the no-loads, you generally still buy directly from the fund rather than through a broker. If you are going to buy a high-quality fund and hold it a number of years, a 2% or 3% sales charge shouldn't discourage you.
ADVANTAGES OF MUTUAL FUNDS
Mutual funds have several advantages. The first is professional management. Decisions as to which securities to buy, when to buy and when to sell is made for you by professionals. The size of the pool makes it possible to pay for the highest quality management, and many of the individuals and organizations that manage mutual funds have acquired reputations for being among the finest managers in the profession.
Another of the advantages of a mutual fund is diversification. Because of the size of the fund, the managers can easily diversify its investments, which mean that they can reduce risk by spreading the total dollars in the pool over many different securities. (In a common stock mutual fund, this means holding different stocks representing many varied companies and industries).
I think that the size of the pool gives you other advantages. Because the fund buys and sells securities in large amounts, commission costs on portfolio transactions are relatively low And in some cases the fund can invest in types of securities that are not practical for the small investor.
The funds also give you convenience First, it's easy to put money in and take it out The funds technically are "open-end" investment companies, so called because they stand ready to sell additional new shares to investors at any time or buy back ("redeem") shares sold previously You can invest in some mutual funds with as little as $250, and your investment participates fully in any growth in value of the fund and in any dividends paid out. You can arrange to have dividends reinvested automatically.
If the fund is part of a larger fund group, you can usually arrange to switch by telephone within the funds in the group—say from
MUTUAL FUNDS. A DIFFERENT APPROACH
A brokerage account is not the only way to invest. For many investors, a brokerage has disadvantages – the difficulty of selecting an individual broker, the commission costs (especially on small transactions), and the need to be involved in decisions that many would prefer to leave to professionals. For people who feel this way, there is an excellent alternative available— mutual fund.
To my mind, it isn't easy to manage a small investment account effectively. A mutual fund gets around this problem by pooling the money of many investors so that it can be managed efficiently and economically as a single large unit. The best-known type of mutual fund is probably the money market fund, where the pool is invested for complete safety in the shortest-term income-producing investments. Another large group of mutual funds invest in common stocks, and still others invest in long-term bonds, tax-exempt securities, and more specialized types of investments.
The mutual fund principle has been so successful that the funds now manage over $400 billion of investors' money — not including over $250 billion in the money market funds.
Friday, December 15, 2006
IS IT DIFFICULT TO BE A STOCK SPECIALIST?
What if a buyer comes in when no other broker wants to sell close to the last price? Or vice versa for a seller? How is price continuity preserved? At this point enters the Specialist. The specialist is charged with a special function, that of maintaining continuity in the price of specific stocks. The specialist does this by standing ready to buy shares at a price reasonably close to the last recorded sale price when someone wants to sell and there is a lack of buyers, and to sell when there is a lack of sellers and someone wants to buy. For each listed stock, there are one or more specialist firms assigned to perform this stabilizing function. The specialist also acts as a broker, executing public orders for the stock, and keeping a record of limit orders to be executed if the price of the stock reaches a specified level.
Some of the specialist firms are large and assigned to many different stocks. The Exchange and the SEC mc particularly interested in the specialist function, and trading by the specialists is closely monitored to make sure that they are giving precedence to public orders and helping to stabilize the markets, not merely trying to make profits for themselves. Since a specialist may at any time be called on to buy and hold substantial amounts of stock, the specialist firms must be well capitalized.
In today's markets, where multi-million-dollar trades by institutions (i. e. banks, pension funds, mutual funds, etc.) have become common, the specialist can no longer absorb all of the large blocks of stock offered for sale, nor supply the large blocks being sought by institutional buyers. Over the last several years, there has been a rapid growth in block trading by large brokerage firms and other firms in the securities industry. If an institution wants to sell a large block of stock, these firms will conduct an expert and rapid search for possible buyers; if not enough buying interest is found, the block trading firm will fill the gap by buying shares itself, taking the risk of owning the shares and being able to dispose of them subsequently at a profit. If the institution wants to buy rather than sell, the process is reversed. In a sense, these firms are fulfilling the same function as the specialist, but on a much larger scale. They are stepping in to buy and own stock temporarily when offerings exceed demand, and vice versa.
So the specialists and the block traders perform similar stabilizing functions, though the block traders have no official role and have no motive other than to make a profit. As you see their work is very difficult.
<:3 )~~~~~~
Yours sincerely,
AlexSandra
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