The 3 Most Basic Thoughts for Mutual Fund Investing Online

timing is key in tradingIf you are thinking of investing some money then you have thousands of options available in the form of mutual funds.

However, how do you know what the right one or best one is for you to open? Is investing online in mutual funds the right thing for you to do right now?

If these things aren’t possible now or might stretch you a bit too thin in your personal life then mutual fund investing online may not be the best option right now.

Different accounts may be available for mutual fund investing online that are found in the bank you can walk into down the street and it is very worth your while to check into this before making a final decision. With different companies come different requirements, some require you to place cash up front and others may not require any cash to open the account.

You should (for “should” – read ‘must’) do an extensive detailed search to find an account that fits your needs as well as your bank account. Your best research tool is the World Wide Web and it is right at your fingertips 24 hours a day, seven days a week.

The subject of fees is always a tricky one to partake in and accounts online may be better for personal access as well as learning the subject, but the fees will still be there. Brokers online and brokers in big, fancy offices are going to charge fees whether you like it or not, but some may have “no fee” accounts that require certain balances or certain types of accounts.

Read the fine print, that is always where the important stuff is printed and you need to know everything about the place that is holding your money. No broker is truly going to “hide” fees and hang onto their trading license for long, but it is up to you to read everything you sign, even the “terms of service” to understand exactly what you are getting yourself into.

Some websites will also help you by giving daily, monthly, and historical mutual fund data so you can make informed decisions. View everything available on the particular fund you are thinking of investing in, it is the best way to find the best account that is open to you or investors just like you.

grow money slowBreak-Even-Or-Better Investing Strategy!

The Break-even-or-better strategy is designed to either (1) show a profit for the year or, (2) at least, show no loss.

A portfolio invested in 1 year Treasury bills, purchased at a discount and maturing at face value provides the cash, through the interest earned, to purchase (hopefully) attractively priced options.

Best case: If an investor is good at picking the right options on the right stocks that rise or fall a good distance during the life of the options, the profits can be significant. And the investor gets to reinvest the interest.

Worst case: The interest earned on the maturing Treasury bills offset the option losses (break-even).

Leverage and truncated risk (no margin calls; no short squeezes). No fuss, no muss.

Heads you win, tails you break even.

Sort of like visiting a casino that pays off if you win or returns your bets if you lose. Not bad.

In an inflationary era, simply holding the same number of dollars over any period of time constitutes a real loss of capital. Capital value hinges on purchasing power and, as purchasing power erodes, so does capital.

That being said, I’m sure, at the end of some years, there are more than a few investors that wouldn’t mind being in a break-even or better position. Know what I mean?

As an alternative, growth stocks, rather than options on those stocks, financed from the interest earned from the Treasury bills in your portfolio, replaces wasting assets with permanent assets.

Results: Win, lose or draw, the stocks are yours for better or for worse, for as long as you both shall live.

On the other hand, should your stocks go bust, your Treasury bill interest will provide the cash for you to try again. Again, not bad.

Because No One Cares More About Your Money Than You

DISCLAIMER: Futures, stocks and options trading involves substantial risk of loss and is not suitable for every investor. The valuation of futures, stocks and options may fluctuate, and, as a result, clients may lose more than their original investment. The impact of seasonal and geopolitical events is already factored into market prices. The highly leveraged nature of futures trading means that small market movements will have a great impact on your trading account and this can work against you, leading to large losses or can work for you, leading to large gains.

If the market moves against you, you may sustain a total loss greater than the amount you deposited into your account. You are responsible for all the risks and financial resources you use and for the chosen trading system. You should not engage in trading unless you fully understand the nature of the transactions you are entering into and the extent of your exposure to loss. If you do not fully understand these risks you must seek independent advice from your financial advisor.

All trading strategies are used at your own risk.


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