Jason Kelly, the author of this text entitled The Neatest Little Guide to Mutual Fund Investing is a 1993 graduate of the University of Colorado at Boulder. Kelly worked for several years at IBM's Silicon Valley Laboratory, where he wrote articles and books that won him the Society for Technical Communications Merit Award. He moved from writing about computers to writing about finance and found his niche in the stock market.
Kelly says there are more and more mutual funds as more and more people understand that mutual funds are the best place to put money, revealing that these include the good and the bad; the very safe and the very risky. He states that to find the free market expert tips money that is right for you without spending a lifetime trying to become a market, and finding yourself in graphs and charts, what you need to do is spend some time with this text, that will lead you through mutual fund maze of wit and wisdom.
Kelly says this text briefly tells you the different types of mutual funds; how to choose your own goals and determine your own risk level; how to waste your investment funds to reflect your wants and needs; how to quickly learn which funds are the best of their kind; how and where to buy funds at the lowest price; how to find hidden charges; how to track performance; how to know when to sell; how to get funds to work for you in retirement etc.
This author educates that the ten steps to investing in mutual funds teach what a mutual fund is; choosing your goals; choosing an acceptable level of risk for your goals; decide which assignment is right for you; matching your allocation to fund categories; examine the funds; choice of your funds; purchase of your funds; tracking your funds; and sell your funds.
Structurally, this text is divided into seven chapters. Chapter 1 is entitled The Best Investment You Can Buy. According to Kelly here, "mutual funds have become the choice of millions of investors around the world. Today, you can choose from over 8,000 funds - far more choices that you find on the New York Stock Exchange .... A mutual fund is a collection of money from investors with a common goal. The 'mutual' part is the common goal and the 'fund' part is money. When you invest in a mutual fund you put your money in a pot of other people's money. to buy stocks, bonds and money market instruments. In exchange for your money, you get shares in the fund. "
This expert says a stock's price fluctuates with the value of what the fund owns, adding that if you send $ 100 to a fund whose shares are worth $ 10, you will own ten shares. "If the value of the shares, bonds or money market instruments owned by the fund increases, so does the price of the stock, and so does your investment. For example, say the price of each stock increases to $ 11. Your original $ 100 will have turned into $ 110 because each of your ten shares is worth a dollar more. Of course, it works in the other direction too, but more on the latter, "Kelly adds.
He explains that the price of each fund share is called its "net transition value" or "NAV" too short, and at the end of each day, the net transition value is determined by dividing the value of a fund's investment by the number of shares sold.
According to Kelly, the most common funds are called open-end funds, and the other type of mutual funds is called Closed-end. This author explains that when someone sends money to an open-end fund, he or she buys shares in the fund worth that day's net worth, plus a sales commission if there is one.
He adds that an investor can sell shares back to the fund for the current net worth at any time. As for the closed-end funds, Kelly says these sell a limited number of shares, adding that if you only want but shares in one of those funds, you need to buy them in the stock market from someone who already owns them.
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