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Outlined below are some of the advantages and disadvantages of mutual funds. Every investment has advantages and disadvantages. But it’s important to remember that features that matter to one investor may not be important to you. Whether any particular feature is an advantage for you will depend on your unique circumstances.

Advantages

For some investors, mutual funds provide an attractive investment choice because they generally offer the following features:

Professional Management:

Professional money managers research, select, and monitor the performance of the securities the fund purchases.

Diversification:

Diversification is an investing strategy that can be neatly summed up as “Don’t put all your eggs in one basket.” Spreading your investments across a wide range of companies and industry sectors can help lower your risk if a company or sector fails. Some investors find it easier to achieve diversification through ownership of mutual funds rather than through ownership of individual stocks or bonds.

Affordability:

Some mutual funds accommodate investors who don’t have a lot of money to invest by setting relatively low pound amounts for initial purchases, subsequent monthly purchases, or both.

Liquidity:

Mutual fund investors can readily redeem their shares plus any fees and charges assessed on redemption at any time.

Disadvantages

But mutual funds also have features that some investors might view as disadvantages, such as:

Costs despite Negative Returns:

Investors must pay sales charges, annual fees, and other expenses regardless of how the fund performs. And, depending on the timing of their investment, investors may also have to pay taxes on any capital gains distribution they receive – even if the fund went on to perform poorly after they bought shares.

Lack of Control:

Investors typically cannot ascertain the exact make-up of a fund’s portfolio at any given time, nor can they directly influence which securities the fund manager buys and sells or the timing of those trades.

Price Uncertainty:

With an individual stock, you can obtain real-time (or close to real-time) pricing information with relative ease by checking financial websites or by calling your broker. You can also monitor how a stock’s price changes from hour to hour – or even second to second. By contrast, with a mutual fund, the price at which you purchase or redeem shares will typically depend on the fund’s net asset value, which the fund might not calculate until many hours after you’ve placed your order.

Making any sort of investment involved a certain amount of risk so it is always wise to seek the advice of a professional before making any decisions.

Are you interested in trading on the futures market? If so, you will be trading commodities, but commodities that will be traded or bought in the future. This is most often apparent with a commodity derivatives contact. This is an agreement that is made between two parties stating that a particular commodity will be purchased and paid for at a later, future date.

If you are inexperienced, when it comes to futures trading and commodity trading, you may be a little bit “lost.” Unfortunately, this is the point when many people just turn away thinking that commodity derivatives isn’t right for them. Yes, it might not necessarily be, but it is something that you may want to at least look into. Although commodity derivatives, commodity derivatives contracts, and futures trading may seem like foreign material to you, there are a number of different ways that you can go about learning about them.

As for familiarizing yourself with commodity derivatives and other futures trading terms, you may want to look into purchasing yourself a number of printed resource guides or books. There are many how-to books that can educate you on futures trading, as well as commodity derivatives. You may also want to take a training program or participate in a futures simulated trading program. These types of programs are often offered by futures brokers and they are often free to use. Simulated trading programs allow you to trade will real market time and stats, but without using any “real money.” The tips and techniques that you learn may not only give you an idea as to whether or not futures trading is right for you, but it may also prove helpful when it comes down to making real commodity derivatives contracts.

One of the many benefits to first familiarizing yourself with commodity derivatives was briefly touched on above. That benefit is knowing what to expect. Commodity derivatives and futures trading is a great way to make money, but is also an easy way to lose money. To prevent yourself from losing your hard earned money or getting in over your head, you need to take the time to learn and retain as much information as you possibly can. If you don’t, you may regret the day that you ever decided to give futures investing a try and that isn’t how it should be.

If after a little bit of research and the participation in a simulated futures trading program, you are still unsure about what to do, you may want to think about consulting with a futures trading broker. As long as the have the funds needed to invest in futures trading, there are numerous ways that you can go about making money, even if you aren’t as familiar with futures trading and commodity derivatives as you would like to be. That way involves working with a futures trading broker. Many brokers allow you to setup a trading account, like a professionally managed account, where most of the decisions made will be done by the assigned broker, so there is always hope for you.

All of us love school. It is especially when there is no essay task. The school is fun and it will give us a lot of experiences we will never forget. That is why school is fun. However, it is very sad that the school has essay task. It is true that according to the teachers essay task is the best way to make sure that the students have received an adequate amount of information about the subject which is taught in the class. However, it is really terrible for the student when they have to face more than one essay task at a time.

That is why essay tasks are terrible. This is the reason why we hate school and this is why we need to develop a great way to finish essay task. We can give you a suggestion for that. if you want to finish your essay task well you need to do it far from the day of deadlines and when you need to finish more than one essay task; contact the essay writing service on the internet or you can just contact them anytime you want because they will help you to finish your task.

When the cyclist goes to purchase Mexican motorcycle insurance, he or she should realize that there are two types of coverage. Some cyclists request full coverage. Full coverage remains effective only so long as the cyclist stays on conventional roads. A decision to ride off road deprives the cyclist of the ability to claim the full coverage.

Full coverage includes compensation for collision damages, theft, liability and legal assistance. Full coverage gives the cyclist more than is required by law. The purchase of Mexican motorcycle insurance that promises only liability coverage satisfies fully the Mexican legal requirements.

Liability coverage insures the delivery of compensation to the third party. Liability coverage, like full coverage remains valid only as long as the motorcycle rider stays on a conventional road.

Liability coverage should keep a motorcyclist out of jail. In the event that the cyclist does encounter problems, the liability coverage insures the cyclist of access to legal services. Such services include bail bond costs and attorney fees.

The decision to take a motorcycle into Mexico should be made with an awareness of the added hazards on the roads in that country. The purchase of Mexican motorcycle insurance offers protection from those added hazards. Some of the biggest hazards show up at night.

When a cyclist travels at night, he or she faces a greater risk of victimization from highway crime. The exposed cyclist is especially vulnerable to such crimes. Unfortunately, crime is not the only added danger at night.

Often local farmers choose to take their livestock across a local road during the night. A motorcyclist could thus end up running into a cow or sheep while out for a night ride. The resulting damages would be covered, if the cyclist had purchase Mexican motorcycle insurance.

A number of Mexicans drive around in cars with broken brakes. At night, the cyclist must also worry about cars with no lights. Because Mexicans do not always pay to have their cars in top working order, the cyclist in Mexico should plan to pay for Mexican motorcycle insurance. That covers damages resulting from collision with a far less than perfect motored vehicle.

One further note of caution should be issued to the cyclist headed for Mexico. That country has many unmarked construction sites. They pose a big risk to the motorcycle rider.

In order to worry less about that added risk, the motorcycle rider should plan to purchase Mexican motorcycle insurance.

Whole life is the most common type of permanent life insurance that cover the policyholder over the course of his/her entire life as long as premium are paid by the policyholder or policy itself.

There are 4 types of whole life insurance

1. Participating policy
The policy owner shares with the insurer in some of the risks and rewards associated with the expenses and mortality gains/losses associated with life insurance underwriting. Participating policies entitle the policy owner to a return on investment in the form of dividends.

2. Non-Participating policy
The policy owner do not share in any of these variables:
a) All of the premiums, benefits, and
b) Values associated with the policy are fixed and guaranteed at the time of policy issue.

3. Interest rate sensitive policies
In interest rate sensitive policies, premium rates are based on estimates or assumptions, respecting future claims, investment earnings, and operating expenses. Since premiums and benefits for traditional whole life products are guaranteed throughout the term of the contract, estimates of future investment earnings must, of necessity, be conservative.

4. Adjustable premium whole life
In Adjustable premium whole life, the sum insured and the premiums are guaranteed for a limited period. At the end of that period, investment yields are higher than those prevailing, when the contract was made, one of two things happens: Either

a) The sum insured will be increased without increasing the premium, or
b) The sum insured will be maintained and the premium will be reduced, to reflect the higher interest rate applied.

Conversely, if investment yields are lower than anticipated, then the sum insured will be decreased on the same basis, but the policy owner will usually have the option of paying a higher premium, in order to restore the sum insured to its previous level.
I hope this information will help. If you need more information, you can read the complete series of the above subject at my home page:

Rising interest rates are another reason to avoid Equity-Indexed Annuities. If you are retired or near retirement, don’t let yourself be talked into purchasing an Equity-Indexed Annuity. If you do, it could easily be a decision you regret for many years to come.

I’ve been called ‘a lone voice in the wilderness speaking out’ about the dangers of equity-indexed annuities. It seems that everywhere you turn there is an advisor or insurance agent telling you an equity-indexed annuity is the greatest thing since sliced bread. Don’t believe them.

I’ve talked at length in other articles about the hidden dangers in Equity-Indexed Annuities. You can find those articles at http://www.guardingyourwealth.com, but the 3 main reasons are (1) they needlessly require you to lock up your money for a very long time, (2) the majority of your returns are still based on the stock market and (3) the commissions for selling an Equity-Indexed Annuity are so high it creates a tremendous conflict of interest for those recommending them. Rising interest rates are just one more reason. Let me explain.

Equity-Indexed Annuities eliminate your flexibility and control over YOUR money. In today’s post-9/11 world where terrorism is a very real threat, it’s important that you have the ability to make changes to and access all of your money when you need to–without incurring surrender penalties that can be as high as 20%! Locking your money into an Equity-Indexed Annuity for 10-15 years causes you to lose control of all but a small portion of it. Equity-Indexed Annuities don’t offer enough reward in exchange for such a long-term commitment.

The main selling point of an Equity-Indexed Annuity is the ability to participate in the return of the stock market but have a ‘guarantee’ that your money will earn at least 3%. The performance of these investments is designed to come from the stock market, not the guarantee. If you are willing to invest in the stock market, I feel there are better ways to do so which provide downside protection while allowing you to retain complete control and flexibility. (Contact me for more information.)

Rising interest rates is another reason you shouldn’t invest in an Equity-Indexed Annuity. Over the past 3 years, the thought of earning a 3% fixed return on your money didn’t sound too bad. Certificates of Deposit at the local bank have only been paying 1% or 2%. That’s made it difficult for those relying on that income to meet their monthly needs. Equity-Indexed Annuity salespeople have used this as a main selling point.

But things have changed. The Federal Reserve recently increased the Federal Funds interest rate by one quarter of one percent. That may not sound like much, but it’s the first time they’ve raised rates in four years. They also signaled that the economy is heading in the right direction and that they’ll continue to raise interest rates over the next few years as necessary to keep inflation in check.

The interest rates available on Federally Insured Certificates of Deposit (CDs) have already risen significantly. You can earn almost 2.5% on a 1-year CD and over 3% on a 2-year CD. The futures markets project that Federal Funds interest rates could be as high as 3% by the end of 2005. That’s means it is likely that you’ll be able to get a 1-year CD for over 4% and a 2 or 3-year CD for 5%.

Think about it–if you can earn 5% on a short-term, Federally-insured Certificate of Deposit, why would you want to lock your money up for 10 to 15 years with a guarantee of only earning 3%? Especially if you’d have to pay a penalty that could be as high as 20% to get at more than just a small portion of it! It just doesn’t make sense.

For those needing income, now is the time to be patient. Use short-term investments like Certificates of Deposit that mature in 1-year or less. When they come due, chances are rates will be significantly higher and your patience will be rewarded.

If you’d like me to answer specific questions about your financial situation, feel free to email me at jeff@guardingyourwealth.com or call 1-877-827-1463. I regularly respond to readers’ questions and would be happy to answer yours.

Mr. Voudrie is a Certified Financial Planner, nationally syndicated newspaper columnist and President of Legacy Planning Group, Inc., a Private Wealth Management Firm in Johnson City, TN.