Random Flashcards
Risk and Return Between Different Types of Mutual Funds (lowest to highest)
Money Market Fund
Mortgage Fund
Bond Fund
Balanced Fund
Dividend Fund
Equity Fund
Real Estate Fund
Specialty Fund
Steps for Selecting a Mutual Fund
- Refer sources of published mutual fund performance data
- Identify funds with appropriate investment objectives
- Look for funds with the best long-term performance
- Among the best long-term performers, look for the best performance from year to year
- Among the best year to year performers, find those with lower volatility
- Among the fund with low volatility, find ones where the current investment manager was responsible for the good performance
- Compare fund facts documents and compare prospectuses
- Examine fees and charges
- Analysis the size of the mutual fund
- Make a decision
Closed-End Fund
Managed pool of securities traded on the stock exchange with a fixed number of shares.
Closer to be being fully invested
Is generally fixed, capital gains, dividends and interest distributions are paid directly to investors
Open-End Fund
Mutual Fund
Varience
Measures the extent to which the possible realized returns differ from the expected return or the mean
Standard Deviation
The measure of risk commonly applied to portfolios and to individual securities within that portfolio
The greater the standard deviation the larger the likely range of possible future outcomes therefore the greater the risk
Beta
Another statistical measure that links the risk of individual equity securities or a portfolio of equities to the market as a whole
Higher Beta= portfolio exposed to more risk
Fundamental Analysis
Involves assessing the short, medium and long range prospects of different industries and companies. Involves studying the capital market conditions and the outlook for the national economy.
Means studying EVERYTHING
Technical Analysis
The study of historical stock market behaviour to identify recurring patterns in the data
