History of Mutual Funds

In the 1960's there was a phenomenal rise in aggressive growth funds (with very high risk). Sometimes called "go-go" funds, they received the majority of the billions of dollars flowing into mutual funds at that time. In 1968 and 1969, over 100 of these new aggressive growth funds were established, bragging about how heavily invested they were in the new technology stocks.

A severe bear market began in the fall of 1969. People became disillusioned with mutual funds and the stock market. "The market's toast. it'll never get back to where it was!" was echoed by panicked investors.

Unemployment grew, inflation went crazy, and investors pulled billions back out of the funds. They should have hung in there! Even the author of this book made the mistake of cashing in his mutual fund shares. The fund he jumped ship on has risen 9,000% since then.
 

The 1970's saw a new kind of fund innovation: funds with no sales commission called "no load" funds. The largest and most successful no-load family of funds is the Vanguard Funds.

Before we continue with all you need to know about mutual funds, here is something that merits your attention. Since 1940, no mutual fund has gone bankrupt. You sure can't say that about banks or savings and loans!

You may be wondering that with thousands of mutual funds and many, many types, how does one intelligently select the best one? Well, we're going to explore the various kinds and some of their good points and bad points.

Keep in mind that before you invest, you need to know what a fund buys, what the manager's philosophy is, and what gives you confidence that this is a good fund to own. If you can't answer these questions in just a couple of sentences and in a way that your grandmother can understand, then maybe the fund isn't for you.

Choosing a fund isn't complicated unless you want to make it so. I am going to show you your options, but if you want a no-brainer that will definitely work, just put every extra dime into the Vanguard S&P 500 Index Fund. Keep throwing your money at it month after month and you will outperform at least 80% of the professional money managers. The reason that we don't end the chapter right here with this advice is that by educating yourself with additional information, you can do even better.

Other Stock Market Basics Topics:

1. Mutual Fund Advantages
2. History of Mutual Funds
3. NAV
4. Dollar Cost Averaging
5. General advice about choosing a fund
6. Mutual Fund Ratings
7. Evaluating Mutual Fund Investment Risk
8. Mutual Fund Share Classes
9. Mutual Fund Fees
10. The Mutual Fund Prospectus
11. How important is the manager's length of experience?
12. Why is the prospectus hard to understand?
13. Mutual Fund Annual Report
14. Comparing your fund to the competition
15. Comparing funds on an after-tax basis
16. Average Return on Investment
17. How Not to Pick a Mutual Fund
18. Cashing in Your Fund
19. When to Sell Your Fund
20. Mutual Funds and Asset Allocation
21. When to get started with a mutual fund
22. Types of Mutual Funds
23. Value Stock Funds
24. Growth Stock Funds
25. Small and Micro-cap Stocks
26. Mid Cap
27. Large Cap Companies
28. Income Stock Funds
29. Mutual Fund Index
30. Enhanced Index Funds
31. Sector Mutual Funds
32. Stock Market Sectors
33. Defensive Stocks
34. International Funds
35. Real Estate Mutual Funds
36. Socially Responsible Funds
37. Balanced Funds
38. Tax-Efficient Funds
39. Bond Convertible Funds
40. Junk Bond Funds
41. Mixtures of stock types
42. Closed End Funds
43. Exchange Traded Funds (ETF’s)
44. Stock Picking Strategy - Picking your own stocks?
45. Fund names, and what they really invest in
46. How to get started
47. Where can I start investing with no money?
    

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