THINGS YOU NEED TO KNOW ABOUT

INVESTING

RETURNS

Mutual funds are like many other investments

without a guaranteed return: there is always the possibility that the

value of your mutual fund will depreciate.

RETURNS

Unlike fixed-income products, such as

bonds and Treasury bills, mutual funds

experience price fluctuations along with

the stocks that make up the fund.

RETURNS

When deciding on a particular fund to buy, you need to research the risks involved – just because a professional manager is looking after the fund, doesn’t guarantee good performance.

That’s largely dependent on the skill of the Fund

Manager in picking winning investments.

RETURNS

ADVERTISING

The first thing you need to be aware of is to ignore the pretty brochures and attractive advertising.

ADVERTISING

Some funds may be incorrectly labeled and can therefore manipulate prospective investors by using names that “sound nice.

ADVERTISING

Instead of labeling itself a small cap, a fund may be sold as a “growth fund”. Or, the “Zimbabwe High-Tech Fund” could be sold with the title “International High-Tech Fund”.

DIVERSIFICATION

Diversification is touted as one of the advantages of mutual funds but many

fund investors tend to over-diversify.

DIVERSIFICATION

Warren Buffett’s belief is over-diversification can hamper returns as much as a lack of diversification. That’s why he doesn’t invest in mutual funds.

DIVERSIFICATION

It’s also why he prefers to make significant investments in just a handful of companies.

DIVERSIFICATION

The reverse is also true if investors acquire many funds that are highly related and, obviously, don’t get the risk reducing

benefits of diversification. If a fund invests only in a particular industry or region it is still

relatively risky.

FEES

Mutual funds provide investors with professional management, but by allowing you to take a hands-off approach to investing comes at a cost. You pay operating fees charged as an annual percentage – usually ranging from 1-3%.

You’ll also pay fees for purchasing or selling the

funds. These are fees you have to pay regardless of

the performance of the fund. This means that

even if your fund doesn’t make any money, you’ll

still have to pay the fees.

FEES

Success Resources Pte Ltd Main Office: 10/11 Pahang Street, Singapore

198611 Toll Free: 1800 7822 377

Direct: +65 6299 4677 Fax: +65 6295 2441

Email: info.sg@srpl.net Website: http://www.srpl.net