Tuesday, December 16, 2008

Funds Performance

Many investors prefer to choose a mutual fund because of its past performance record. The sponsor of the mutual fund tries to highlight the best times and results during the past years, which are precisely selected. They also glorify those investment manages who had the best results for some particular period. They focus on their victories and avoid talking about their slow times and losses. That is why this information is not very helpful, it is flawed. Investors should first pay attention to the principal characteristics of the fund and only then evaluate its past performance records.
You have to ask many question, to protect your money put into the investment market. According to many laws and regulations, all investors are to have access to some key info about an investment before they put the money in it. And that is why companies should disclose these facts and offer some basic knowledge to investors.
To make your investment fruitful, you have to be careful and educated. First of all, you have to learn the financial information about the company you are going to deal with. The most important facts that you have to check are different periodic reports, registration statement, and prospectus. This is all that the company has to disclose according to the Investment Company Act. You have to search for your own methods that will work the best on you and your investments.
Adequate information should be available to any prospective investor. And this information that is disclosed in a form of a document is called prospectus. A prospectus is a document that should contain the following information: the name of the fund, information about the investments of the fund, annual and semi-annual reports to shareholders should be available upon request. The prospectus should also include investment objectives and goals and risk and return summary.
Investment companies specify their investment policy in their prospectuses. An investment manager has a broad latitude in where to invest the assets of the fund. Investment adviser is a very important person who takes almost all control over your money. That is why it is also essential to learn more about your money manager.
And then, on the basis of all this information, you can make a decision of whether to purchase the shares or not. And it should be a balanced and objective decision.

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