It is very easy to get caught up in the moment. When reading that statement, it’s likely that the notion of a romantic encounter came to you mind. But romance isn’t the only situation in which people get carried away. That’s why it’s important for investors to do their research before purchasing an investment, even a mutual fund, to ensure that the relationships they create aren’t made in the heat of the moment.
Options have their place in an investor’s overall toolkit. When used judiciously, options can help increase the income generated by a portfolio and provide downside protection to wary investors. Two funds to examine that use options are Van Kampen Equity Premium Income Fund (VEPAX) and Gateway Fund (GATEX). Although the news in recent years has highlighted the risks of certain investment strategies, such as options, the headlines shouldn’t dissuade investors from learning more.
When investors look at purchasing a fund, they often review a fund’s objective and its historical performance. While both are logical to examine, it is also important to know exactly who it is that is managing the fund, since this person is, ultimately, the one to whom an investor is entrusting his or her money.
Mutual funds rose in popularity during a time when the accumulation of wealth was the main focus of most investors. Now, however, as more investors end their work careers, there looms a demand for a product that replaces a salary. This is the exact opposite of what most mutual funds are set up to do and the vast majority of fund companies do not appear to be preparing for the change that is slowly happening. A few, however, have ventured into the waters of distribution-focused mutual funds.
The federal government, as part of the Tax Increase Prevention and Reconciliation Act of 2005, permanently eliminated the $100,000 limit for Roth conversions, starting January 1, 2010. This change, combined with the recent decline in stock prices, has given many subscribers a chance to convert to a Roth account, and with less tax owed on conversion than if stocks were at higher levels.
Target-date mutual funds have been the subject of much scrutiny over the past weeks and months. These funds are generally meant to be the sole holding for an investor, providing a diversified mix of assets that change over time, becoming more conservative as the “target date” draws near. In general, the “target date” is expected to be the investor’s retirement date. The general logic of these offerings is to do for investors what they may not be able to do for themselves—provide diversification/asset allocation and a structured investment program that changes (becomes more conservative) as the investor ages.
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Knowing What You Own
It is very easy to get caught up in the moment. When reading that statement, it’s likely that the notion of a romantic encounter came to you mind. But romance isn’t the only situation in which people get carried away. That’s why it’s important for investors to do their research before purchasing an investment, even a mutual fund, to ensure that the relationships they create aren’t made in the heat of the moment.
Options Strategies The Pros Use
Options have their place in an investor’s overall toolkit. When used judiciously, options can help increase the income generated by a portfolio and provide downside protection to wary investors. Two funds to examine that use options are Van Kampen Equity Premium Income Fund (VEPAX) and Gateway Fund (GATEX). Although the news in recent years has highlighted the risks of certain investment strategies, such as options, the headlines shouldn’t dissuade investors from learning more.
For Some Funds it’s All About the Manager
When investors look at purchasing a fund, they often review a fund’s objective and its historical performance. While both are logical to examine, it is also important to know exactly who it is that is managing the fund, since this person is, ultimately, the one to whom an investor is entrusting his or her money.
Funds with a Focus on Distributions
Mutual funds rose in popularity during a time when the accumulation of wealth was the main focus of most investors. Now, however, as more investors end their work careers, there looms a demand for a product that replaces a salary. This is the exact opposite of what most mutual funds are set up to do and the vast majority of fund companies do not appear to be preparing for the change that is slowly happening. A few, however, have ventured into the waters of distribution-focused mutual funds.
IRA Investors Have a Window of Opportunity to Convert to a Roth
The federal government, as part of the Tax Increase Prevention and Reconciliation Act of 2005, permanently eliminated the $100,000 limit for Roth conversions, starting January 1, 2010. This change, combined with the recent decline in stock prices, has given many subscribers a chance to convert to a Roth account, and with less tax owed on conversion than if stocks were at higher levels.
Target-Date Mutual Funds — Proceed With Caution
Target-date mutual funds have been the subject of much scrutiny over the past weeks and months. These funds are generally meant to be the sole holding for an investor, providing a diversified mix of assets that change over time, becoming more conservative as the “target date” draws near. In general, the “target date” is expected to be the investor’s retirement date. The general logic of these offerings is to do for investors what they may not be able to do for themselves—provide diversification/asset allocation and a structured investment program that changes (becomes more conservative) as the investor ages.