All About the Mutual Funds

Let's suppose you're just getting started as an investor and have $10,000 to invest and you have three important objects you want to achieve.

1st, Want security, don't lose money in a risky venture, like that found in a certificate of deposit or other fixed income investment.
2nd, Want to make the most money you can, so you want the prospect for growth potential, too.
3th, Want professional money management -- occasionally diversifying your investments into promising new opportunities, since you don't have the time or knowledge to actively manage your money.

It sounds like to be a very good plan, but where can you invest your money and have a chance to meet all three criteria? The answer for more and more Americans is to invest in funds.

What Is Mutual Funds?

As an investment tool, mutual funds pool together money from numerous investors and invest this collective sum into a variety of stock, bonds and various other investments.

They are professionally managed on behalf of the shareholders, and each investor holds a pro rate share of the portfolio -- entitled to any profits when the securities are sold, but subject to any losses in value as well.

Types of Mutual Funds?

Most funds can fall into three major types - growth funds,income funds and balanced funds, by how aggressive or conservative they are and by investment objective. A mutual fund can also be a loaded fund or no-load fund, and so on.

Growth funds are more likely to invest in well-established companies stocks where the company itself and the industry in which it operates are thought to have good long-term growth potential.

Income funds are tend to invest in government or corporate securities, it offer its investors a regular income usually paid out in the form of monthly dividends. This is why this type of investment is called a fixed income fund.

Balance funds is funds that invests in a combination of both stocks and bonds

14 Important Questions to Ask Before You Buy a Condominium

Before you buy a condominium, get answers to the following. It could save you time, money and hassles.

1. What percentage of units are owner-occupied? What percentage is rented? Generally, the higher the percentage of owner-occupied units, the more marketable the units will be at resale.

2. What covenants, bylaws, and restrictions govern the condominium property? What grandfather clauses are in place? Ask for a "Status Certificate" (in Ontario) and review the bylaws to determine if those are acceptable to you. Have your lawyer check the "Status Certificate" and seek his legal opinion..

3. How much does the Condominium Corporation keep in reserve fund? How is that money being invested?

4. Are Condominium Corporation assessments keeping pace with the annual rate of inflation? Smart boards raise assessments a certain percentage each year to build reserves to fund future repairs.To determine if the assessment is reasonable, compare the rate to others in the area.

5. What does and doesn't the Maintenance fees cover-common area maintenance, recreational facilities, trash collection, snow removal?

6. What special assessments have been mandated in the past five years? How much was each owner responsible for? Some special assessments are unavoidable. But repeated, expensive assessments could be a red flag about the condition of the building or the board's fiscal policy.

7. How much turnover occurs in the building? On average, how many units are for sale at one time.

8. Is the project in any litigation? If the builders or homeowners are involved in a lawsuit, reserves can be depleted quickly.

9. Is the developer reputable? Find out what other projects the developer has built and enquire residents about their perceptions. If the property is Old, find out if engineering study has been conducted lately to assess the condition of the whole development. If the property is in bad repair, it could become a big financial liability.

10. Are multiple Condominium Corporations involved in the property? In very large developments, umbrella Condominium Corporations, as well as the smaller Condominium Corporation into which you're buying, may require separate assessments.

11. What constitutes "common areas" of the condominium corporation. Who else shares the common areas? Do they pay for it and how is that calculated.

12. Who manages the Condominium Corporation? If it is an outside management company, how long is their contract? A long term contract with an ill management could spell trouble for the unit owners.

13. What are the resale prices and how the subject condominium prices have performed vis a vis other projects and the overall market.

14. How long does it take to sell a property in the complex?

3 Must-Do Tips For Selling That Investment Condo

Not long ago I did a TV segment for Homes and Gardens Television that featured one of my own condos. It's one of those small spaces, easily filled with the tenants' large-scale furniture.

The experience made me think about condos, condo furniture, and how to make the one work for the other when you're ready to sell. So let's talk about condo selling today - how to make your most impressive presentation, sell fast, and get out with the best price.

Determining the right time to sell is easy if you have a pre-planned exit strategy set to trigger the sale. This strategy might be: "Sell when prices rise to where only speculators and homeowners are buying" or "Sell when smart long-term investors are 'leaving the building.'"

A pre-planned exit strategy prevents selling on whim, or holding onto a property too long while you waffle over whether the time is right. Fortunes have been lost by mistakes in either direction! Knowing in advance what will trigger your sale, and acting promptly when that time comes, keeps emotion out of the decision. This is smart strategizing for any investment, whether we're talking stock market or real estate.

Keep these three tips in mind to maximize your profits:

1.) Sell slightly below the peak of the market

Judging when the peak has arrived can be challenging, and most condo investors wait just a bit too long and find themselves selling into a falling market. You never want to be the last one to leave the party - the last one usually winds up feeling the sickest the next day!

Look at what the cash flow is, based on current prices relative to rents. I get the itch to take my money and run when prices go up beyond where I can pocket much from a monthly rental on a property mortgaged at 80 percent. After all, why should I pay someone else for living in my condo? I work hard for my money, and I know you do, too. When it's time to sell, your pre-arranged trigger will keep you from getting fooled into missing the market's peak.

2.) Get the tenant to co-operate

Chances are your tenant won't be overjoyed to hear you've decided to sell and that the condo must now be made available for showing. Giving a bit of incentive to cooperate makes good sense and will pay off in the end. There are a number of ways to motivate your tenant. My favorite is to offer a rebate of a portion of the monthly rent if they keep the place clean, tidy, and make it easy to show.

The other way to provide a win/win is to offer a cleaning service to keep the suite in top shape when viewings happen. Tenants get a nice perk for giving their home up for a couple of hours on the weekend, and you get a great-looking space for potential buyers to see.

Most people underestimate the importance of how their investment condo "shows." Anyone is more likely to buy when they can imagine what living in a certain space would look like, and a condo filled with furniture helps the imagination. By contrast, clothing strewn on the floor and dust on the coffee table give the imagination a negative impetus.

The same thing goes if you're trying to attract tenants. Many times I've opted for renting my condos furnished and providing a cleaning service included in the rent. I've found I can get a higher rent when the property looks staged with properly scaled furnishings and tasteful accessories. And higher rents, of course, mean a higher sale price in the future.

3.) Have all your documentation ready

Selling an investment condo should be like selling a business. Supply a list of assets. These might include some furnishings, but also could include a good long-term lease that has value. When I'm in buyer mode, I want to see what the cash flow is for a property. I look for a financial statement from the past couple of years showing what the net profit has been.

Copies of insurance policies, utility bills, condo association charges, and so forth (when organized properly) can present a strong argument that you have run the condo like a business and that the investment makes sense. Investment buyers want to know everything about the property, particularly if they live in a distant city. Make them feel comfortable making an offer by presenting well-organized association minutes and financial statements.

I always have a local attorney go over documentation so that I don't get surprised by local rules and regulations that could turn out to make my investment unprofitable. Assume any buyer will do the same.

If you follow these guidelines and price your property realistically, you should have no problem getting a buyer to pay a fair price. Soon you'll be joining me out on the road looking for the next great opportunity in another distant city where you can invest your profits!

Why Retirement Preparation is Important

It is a very good idea to have a retirement preparation plan. The nice think about using the retirement plan at work, your employer matches a portion of the money you contribute, which is free money. If you wait until retirement age it can be withdrawn tax free.

Defined benefit (DB) plans provide a set level of pension at the time of retirement; the amount normally depends on your service or performance and your earnings at retirement. The employer guarantees a set amount for the employee to receive upon retirement.

Defined Contribution (DC) plans, is when the employee contributes a portion of their pay and your employer's contributions are both invested and the funds used to buy a pension at retirement. The level of your pension may depend on the amount that has been invested, the return on your investments and the cost of your pension at retirement.

Talk to someone in the human resources department where you work to find out more information on retirement preparation. Some employer's offer it to their employees when they first start or after a grace period. It is fairly easy to sign up for and sometimes you can even chose what stocks or mutual funds that you want to invest in.

If you move from one employer to another you can roll your money over into an IRA or another type of fund. It is important that you keep the money when you leave. You can find a local broker to help you invest the money.

There are companies out there like Charles Schwab, TIAACREF, Edward Jones, Vanguard, Merryl Lynch, that give you another option if your employer does not offer a retirement plan or to roll over your funds. You can contribute money to a mutual fund, stocks, and bonds, CDs or Money Market. This will help you set aside money for retirement preparation. No load mutual funds will cost you less money and be sure to check if there is a fee to invest with a company. Do your research before investing; it will pay off in the end.

Investing For the Long Term

Saving and investing money for retirement is one long-term goal that is held by many of us. How old you currently are, and how many years you have until you will be retiring are the two biggest items to consider when deciding how much money to invest, and which investments to go with. The younger you are and the more years you have before retirement, the more comfortable you will be with more aggressive, and therefore more risky, investments. Things like stocks and real estate investments might be a great idea if you have the time.

There is a useful method for determining how much of your money should go to conservative investments and how much of your funds should be invested in higher growth products. You should subtract your age from 100 (or, if you want to be more aggressive subtract if from 120) and invest the resulting number as a percentage of how much of your allocated funds you should put towards stocks. The other money should be put into bonds. It may sound simplistic but it's a way to make sure that you stay on track and you aren't disappointed when you get to your retirement and find that you didn't properly allocate your funds. Let's see how it works:

For example, if you are thirty years old, you'll want to invest 70% of your investment money into stocks if you want to be conservative. If you want to be more aggressive and can tolerate more risk, you would want to put 90% of your funds into stock and the other 10% into bonds.

In most retirement plans offered at employers they will use mutual funds as the typical investment strategy. If your employer offers more than one mutual fund you'll want to do a bit of research to find out which one meets your criteria more. Choose the one that goes along with your calculations and seems to fit your goal and your comfort level. Not all mutual funds are created equal, some are inherently riskier than others. Don't be afraid to allocate some of your stock fund monies to overseas investments in the form of an international stock fund.

In the past, employees didn't have the chance to determine their own investment decisions when it came to retirement money. These days, employers are leaving most of these choices up to the employees, and forgoing traditional pension plans. The only problem with this is that the average employee is a novice when it comes to investing. If this applies to you be sure to do as much studying and catching up that you can. Get advice from trusted sources and get second opinions on important decisions before you invest.