1. Your Questions About Mutual Funds
Laura asks…
What mutual funds deal exclusively in silver?
I don't want to buy a precious metals mutual fund or one that invests in anything other than
silver and industries based solely on silver production (such as silver mines.) I want to buy ones
that deal only in silver and silver industries. What mutual funds fit my needs?
Steve Winston answers:
Mutual funds? Hmm.. Not that I know. But there are lots of ETF's starting with SLV the ishares
ETF. Investing in ETF's is not that much harder than mutual funds and gives you what you an
investment in just silver stuff.
Now why you want to invest in silver at the current price is another matter. You are late to the
party. You want to invest in the next thing going up not the thing that is already really pricey.
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2. George asks…
How exactly does mutual funds work?
Hello, as a beginner investor how do you actually earn money from mutual funds? I heard that
it's not about compounding interest and that it's about the NAV on the day you wish to withdraw
the funds that will determine your profit?
I had a perception that it was like time deposit, that your initial investment will earn interest and
interest is added up to your initial investment and it will compound over time only that the
interest rates varies every time. This is not the case in mutual funds right or is it?
Can someone enlighten me on this? Thanks.
Note: I know what a mutual fund is at least it's general idea that it's composed of diversified
investments managed by a fund manager. My question is how do you earn technically? Is it like
compounding interest or not?
Steve Winston answers:
A Mutual Fund is a company (a corporation that receives preferential tax treatment under the
U.S. Internal Revenue Code) that combines investor’s money and generally purchases stocks,
bonds other securities. A professional manager or a group of professional managers will make
purchase decisions of securities on behalf of the investors. Investors in turn pay small fees to
these managers.
Here is a good article on selecting Mutual Fund:
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