Mutual funds

[Hopperbin]

So if one buys mutual funds and the mutual fund managers invest that money into gold mines manufacturing companies etc. These shares that these mutual funds invest in pay dividends. What happens to these dividends? Do they get added to the mutual funds value? Do they get raked into fund manager profits? How can you trust a mutual fund? I don't know of a mutual fund showing dividend profits or paying a dividend back to investor. I should ask mutual fund salesman I guess. Just trying to prepare before I meet the slimy LOL.

[ajl]

For the most part they are paid to the mutual fund. Then the fund operators charge management fees. Good for fund operators bad for you. If there is some left after this then they go into a dividend reinvestment program and you get a few more units of the fund once a year typically. My investment advisor got told that mutual fund was a four letter word.

[Choice2U]

Mutual funds are just a combination of individual investments in similar types of instruments (bonds, dividends, Pacific Rim equities, European, mining, banks/financials, etc, etc, etc) for example, a large cap US mutual fund would invest in multinational US companies. Rather than the risk of just investing in a single company, you can spread the risk by investing in a bundle of large US companies. The share value of all those companies reflects the share value of your mutual fund. If you want a mutual fund that pays dividends, you can find one that passes those dividends along to you less their MER (Management Expense Ratio)which is taken off before you get paid. All mutual funds have a MER. Go to globeinvestor.com or morningstar.com and you can search funds by quartile on 1,3,5,10 year returns, MER's, etc and get an idea of how one mutual fund performs versus all other mutual funds in that particular sector. These returns are calculated after MER's.

[agstar77]

Mutual funds are basically for the benefit of the mutual fund. They make a profit before you see a dime. They generally all invest in the same companies . Banks are top of the list. They are for the dummed down investor. Sold all my mutual funds years ago and have not looked back.

[liberty]

Mutual funds seem great when you're in a bull market. That way the management fees don't seem to make much of a dent in your returns. But when you're in a bear market, it's a whole different story.

Before you buy, take a look at the fine print and see what the management fees are. They vary quite a bit depending on the fund.

Mutual funds are probably OK for the beginning investor who doesn't have a whole lot of money to invest or much in the way of expertise.

There's a lot more info out there on investing than there used to be thanks to the internet. There's also a lot more options for investors. Some of the online brokerages charge very little for trades nowadays. Depending on your level of investment knowledge you may want to give that a try.

You could also get in touch with an investment manager at one of the major financial institutions. When you open an account with them, they too have access to mutual funds, but can also give you a much wider range of options like trading stocks, buying bonds, etc. and you can call them up for advice at any time.

For what it's worth, I'd also add gold bullion to any investment portfolio these days. Stick it in a safety deposit box.

[per]

You are much better off utilizing a Capital fund. It is substantially the same except that you are a unit holder and a legal partner in the fund. The one I use has a basic management fee that the fund manager would starve on (I could live fine on it) and then gets a percentage of the profit. The managers also have a substantial investment in the fund which is also an incentive.

[wd9]

You could also do ETF or exchange traded funds.