Tips to Diversify Your Portfolio

On 05/12/2013, in Investment Strategies, by Jordan Wilson

Diversification is crucial for long-term investment success.

Proper diversification, that is.

Today, how to better diversify your investment portfolio. 

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In the U.S., the Standard & Poor’s 500 stock index (S&P 500) is up 12.6% year to date 2012.

That is the good news. The bad?

Your mutual fund is likely not meeting or exceeding this benchmark.

Why the underperformance against investment benchmarks? 

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Vanguard Investment Funds

On 12/03/2011, in Exchange Traded Funds, Mutual Funds, by Jordan Wilson

I like Vanguard investment funds for long term individual investors.

Especially investors who follow a passive management style.

As I am not directly or indirectly compensated in any way by Vanguard I recommend them based solely on their merits.

That is not to say that other funds are poorer choices. I recommend a wide variety depending on a client’s investment objectives, desires, and available offering in their home jurisdiction. I believe in a “best of breed” approach for clients, not what is best for my revenue. And within the “best of breed” options, Vanguard funds pop up with regularity.

Why is this so?  

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For most individual investors, I believe that a passively managed, well diversified investment portfolio is the best approach for long term success.

I do not believe that paying higher fees for active management brings superior results over the long run. Instead, minimize investment costs and stick to index funds for the majority of investments. Let portfolio returns compound in your investment account, not in the pocket of an investment advisor or financial institution.

I have written extensively as to why I believe in this strategy.

Today, a little more evidence that a passive approach outperforms an active one. 

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Investment Related Expenses

On 11/12/2010, in Mutual Funds, by Jordan Wilson

I have written extensively on investment related expenses.

These include: transaction fees, mutual fund sales charges, management fees, operating expenses, administrative costs.

I will keep raising this issue for two reasons.

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Open-End Index Mutual Funds

On 11/07/2010, in Mutual Funds, by Jordan Wilson

Many investors passively invest using open-end index mutual and exchange traded funds.

Some investors lump the two instruments together when discussing passive holdings. And there are a lot of similarities when assessing for investment potential.

But there are also material differences between the two, so I shall discuss them separately.

Today we will take a very brief look at open-end index mutual funds.

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Mutual Fund Performance

On 09/26/2010, in Mutual Funds, by Jordan Wilson

Previously, we looked at fund operating costs.

Today we shall quickly review fund performance data.

As we have covered investment return considerations a while back, we shall keep this brief.

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Mutual Fund Concerns: Operating Costs

On 09/22/2010, in Mutual Funds, by Jordan Wilson

In our last post, we reviewed transactional costs involving mutual funds.

Besides potential sales charges and brokers’ commissions, you must to pay annual fees for the cost of operating each fund on an ongoing basis. These costs can differ significantly between funds and should be reviewed carefully before investing in a specific fund.

In fact, I believe that assessing a mutual fund’s cost structure is a key to investing success.

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Investment Funds

On 08/20/2010, in Mutual Funds, by Jordan Wilson

Investment funds are collective investment schemes.

That means that many investors aggregate their money in a single investment vehicle.

In theory, aggregation allows some or all of the following to individual investors: a simple way to create and maintain an investment portfolio; better portfolio diversification through asset classes and time; access to investments that cannot be bought by small investors; improved liquidity; fund management by investment professionals; economies of scales on expenses that reduce costs allocated to any one investor; consolidation of tax information.

Today we will review four types of investment funds.

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Investment Returns Are Not All Equal

On 06/21/2010, in Investment Concepts, by Jordan Wilson

In Common Investment Returns we reviewed a few basic measures of returns.

In Assessing Investment Returns we looked at having to analyze returns within proper context.

Today we will see the need to look within the return itself when evaluating true performance.

This is because all investment returns are not created equal.

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