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[wizard_jamex]

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How to compute your earnings in Mutual Funds
A lot of people invested in Mutual Funds are still at a loss regarding how their income from this investment is computed. We’ll try to simplify how it’s being done in this discussion.
Step 1: Determine how many shares you own
When you invest in mutual funds, you are actually buying “shares” of the mutual fund company. (See Introduction to Mutual Funds) The price you pay is the NAVPS or the Net Asset Value per Share, a figure that changes every day since it represents the market values of the investment assets the mutual fund company owns.
Let’s assume you want to invest P100,000. When you checked with the mutual fund, the NAVPS price is P1.75. The number of shares you will then get is:

• P100,000 divided by P1.75 = 57,142 shares

Your total fund value that day is:

• 57,142 shares x P1.75 NAVPS = P99,998.50

Since you paid P100,000 but the amount of the shares you bought is only P99,998.50, the company would actually return P1.50 to you.
For simplicity purposes, we did not consider any fees or sales loads charged by the fund. Do note, though, that most funds will charge a fee either upon investment (entry fee) or when redeeming your mutual fund shares (exit fee). We’ll defer computations including fees in a succeeding article.
Step 2: Determine the current NAVPS
At any day, you can compute the value of your mutual fund investment. The only two things relevant to you are:

1. Number of shares you own
2. NAVPS price on that day

Let’s assume that at the end of 1 year, the NAVPS of your mutual fund is P2.50. Your profit is simply the difference between the current NAVPS and the NAVPS when you bought your shares. Multiply this with the number of shares you own and you’ll get the amount of your profit.
Mathematically:

• Current NAVPS = P2.50
• Original NAVPS = P1.75
• Difference in NAVPS prices = P2.50 – P1.75 = P0.75
• Number of Shares Owned = 57,142
• Profit = P0.75 x 57,142 = P42,856.50

This same amount can also be computed by comparing the current total fund value and initial fund value.:

• Beginning fund value = 57,142 shares x P1.75 NAVPS = P99,998.50
• Current fund value = 57,142 shares x P2.50 NAVPS = P142,855.00
• Difference in fund values = Profit = P42,856.50

One major point to remember, though. This profit is still “paper profit” or “unrealized income.” That’s because you have not redeemed the shares yet. Any day afterwards, the NAVPS will still change which means your fund value and profit will also change.
We’ll show this in the next example.
Step 3: Calculate actual profit at time of redemption
Let’s assume you wanted to encash and redeem your shares at the end of the 2nd year. Before we proceed, you need to know that the fund value and NAVPS price at the end of Year 1 are now irrelevant. Whatever “profit” you gained before was not realized since you did not redeem the shares.
Assume that at the end of Year 2, the NAVPS price is P2.00. As in Step 2, we can compute the profit by comparing the current and original NAVPS:

• Current NAVPS = P2.00
• Original NAVPS = P1.75
• Difference in NAVPS prices = P2.00 – P1.75 = P0.25
• Number of Shares Owned = 57,142
• Profit = P0.25 x 57,142 = P14,285.50

At the end of Year 2, your total investment earned P14,285.50. If you redeemed all 57,142 shares, you can now actually earn and get P14,285.50 cash as profit.
The total money you would get from the mutual fund is this profit plus the original investment (P14,285.50 + P99,998.50), which can also be computed this way:

• Current NAVPS = P2.00
• Number of Shares Owned = 57,142
• Total Fund Value = P2.00 x 57,142 = P114,284.00

Again, be reminded that this computation does not consider any fees charged by the fund. Your fund value will be reduced by those fees.
In any case, we hope this gives you an idea how to compute your mutual fund income.

[wizard_jamex]

Why Are Mutual Funds Safer Than Stocks?
By: Amuro Wesley

Top of Form
If you have read my last article, you have probably learn a few things about the pros and cons of stocks and what necessary measures you need to take to avoid losing money and not knowing what to do next. In this article, I am going to introduce mutual funds and why they are perceived by many people to be safer than stocks. I am also going to walk through the steps and strategies which you need in order to enjoy maximum benefits.

A mutual fund is basically a pool of money from investors from around the world in constructing a portfolio of bonds, real estate, securities and stocks. Below are 6 main reasons why mutual funds are much better than stocks on long-term investments.

Automatic Reinvestment
With this, you can have capital gains and dividends reinvested into your mutual fund automatically and easily without having to pay sales load or extra fees.

Can Be Diversified
Most investors buy more than just 1 stock. In order to grow their portfolio, they need to multiply and diversify their stocks. By diversifying, you reduce the risk without sacrificing your money.

Easier To Manage
When you buy mutual funds, you will not be on your own trying to figure out how to make money without losing money. Instead you will be provided with a professional fund manager who knows how to take care of your investments.

Liquidity
What this basically means is that you can exchange them for cash quickly and easily without any hassles.

Only 1 Investment Portfolio Required
This is much better than stocks whereby you need to come up with several different portfolios just to qualify as a long-term stockholder and investor.

Transparency
Most mutual fund holdings are publicly available. This ensures that you as an investor are getting what you are paying for.

Apart from buying, you can sell them too. Here are the reasons why.

Meeting Your Goals

As with every investor, your objectives could be being debt free, enjoying a blessed and fruitful retirement, travelling around the world, providing for your family and kids in every way possible etc.

But along the way towards your goals, changes are inevitable. For example if your children intends to further their studies especially overseas, you certainly need to adjust your porfolio to reduce the risk of losing money and increase the possibility of earning more.

In this case, you can sell some of your investments to buy fixed income types

Change of Fund Manager Or Broker

When a fund manager or broker resigns and another takes over, you should consider selling even if you are being told that the replacement will do an equally excellent job.

The truth is the new fund manager or broker may have a different mindset and philosophy of doing things and managing clients.

These are all the reasons why you should choose mutual funds. However as with most investments, you require capital. The amount usually ranges from a couple of hundred to thousands of dollars. But overall, you do not to spend a lot to get started.





Article Source: http://www.articlesnatch.com

[wizard_jamex]

hapit na ang pasko. Naa namo na save from your pay checks? HMMMM.....

[wizard_jamex]

I invite you to attend Financial Literacy Talk at International Marketing Group, 16 - A Salinas Drive, Lahug, Cebu City (Near JY Mall and across Old Mormon Church). It's open to all. No registration fee. It will start at 2:30 pm to 3:30 pm on October 2, 2010.

Thank you. =)

[wizard_jamex]

Location of our office:
https://www.istorya.net/forums/8042188-post2.html

[chang2x]

@wizard, taga IMG na diay ka? when pa man? ako nagpamember pro la ko ka apil sa mga trainings pa kay busyy kaau life. hehehe incase ma-guess nimo kinsa ko, ayaw na lng saba hap! hehehe keep it secret ...

[wizard_jamex]

@wizard, taga IMG na diay ka? when pa man? ako nagpamember pro la ko ka apil sa mga trainings pa kay busyy kaau life. hehehe incase ma-guess nimo kinsa ko, ayaw na lng saba hap! hehehe keep it secret ...

@Chang

bai, naa man upstart tomorrow. Attend sa panagsa bisan karon nalang saturday. Pag August. 28, 2010 pako nag start diha. Ganahan ko sa ila financial concept. NINDOT...LOL...hasta ila trainings nindot...dili kamahayan....

[wizard_jamex]

I invite you to attend Financial Literacy Talk at International Marketing Group, 16 - A Salinas Drive, Lahug, Cebu City (Near JY Mall and across Old Mormon Church). It's open to all. No registration fee. It will start at 2:30 pm to 3:30 pm on October 2, 2010.

Thank you. =)

Guys, pls. attend this event. You can contact me 09239457591. God bless.

[wizard_jamex]

For those who attended yesterday, Thank you so much for your time.....cheers!

[wizard_jamex]

There are seven levels of investors. Each level characteristic of an investor’s has an attitude toward money and spending.

Level 0: “Nothing to Invest”
- No money to invest. Many “rich” people fall into this category.

Level 1: “The Borrowers”
- Having debt attached to everything they own (properties, business, etc.). They’re either slaves to their credit cards or use borrowed money to spend or invest. Habits of borrowing and spending… I’ll just work harder and pay-off debts in the future…debts solves problem thinking.

Level 2: “The Savers”
- Often prefer low-risk and low-return investments, and believe in paying in cash for fear of being in debt. They often save to spend rather than to invest. Even when shown savings give a negative return (after inflation and taxes) they are still not willing to take on mush risk.

Level 3: “Smart Investors”
- With solid education and resources to invest but lack financial literacy to understand how investing could work for them.

Level 3-A : The “I can’t be bothered group”
Level 3-B : The “cynic”
Level 3-C : The “gambler”

Level 4: “Long Term Investors”
- They understand the fundamentals of finance and are actively involved in their own investment decisions.

Level 5: “The Sophisticated Investors”
- Have a track record of failures and successes, but pack enough wisdom and drive to keep investing.

Level 6: “Capitalists”
- Become excellent businessman using other people’s money, talent, and time to get rich. You should work your way to Level 4 and gain a working knowledge of financial concept to make the shift.


Which level are you? =)