Custom Search

Saturday, October 11, 2008

Equity Mutual Funds

From The Hoss's Mouth


Equity mutual funds are spotlighted in today's Hoss Cents Free Financial Money Magazine. What is an equity mutual fund? You will no doubt remember from the Hoss's money magazine previous post, types of investments, that equities are stocks. Equity mutual funds are simply funds that invest in stocks.

In horse racing a trainer has a choice of entering his horse in sprints, middle distance or long races. He can also choose to run on a grass or dirt track or a grass track one time and a dirt track the next. Similarly, equities have various capitalization (cap)sizes from which to choose and different investment styles to utilize when purchasing equities for a mutual fund.

S/he can choose a value, growth or blend investment style when purchasing stocks for the mutual fund he manages and he can pick between companies that have a small, medium or large cap.

equity mutual funds


Value Investing: An investment style that utilizes detailed research (called bottom-up) to identify companies that for whatever reason are currently (in the opinion of the fund manager and staff) undervalued. The late John Templeton was a value investor. At the time of this posting there are at great number of stocks undervalued.

Growth Investing: Here the mutual fund manager also utilizes the bottom-up approach to obtain an in depth analysis of individual companies. But rather than pick companies that appear undervalue S/he chooses companies that are in currently in favour and growing rapidly. These stocks come at a high price because of their growth and success and potential for continued positive returns.

Blend Funds: A wide open style of investing. The fund manager could invest in conservative, high risk or specific sector stocks. S/he will usually purchase a large number of stocks in sectors of the economy they expect will increase in value.

The Hoss hopes you find some value (pun intended) in today's post. Remember whatever mutual fund(s) you purchase whether it is an equity mutual fund or otherwise make sure the mutual funds investment style compliments your investment goals and risk assessment.

Stay on track,

The Hoss

Next Hoss Cents Free Financial Money Magazine Post: Green Mutual Fund Investing

Previous Post: Alternative Energy Mutual Funds

0 comments:

Post a Comment

Stock Ticker

Disclaimer

The Hoss is not a financial adviser. This blog is a reflection of his personal opinion, experience and financial choices. For financial assistance, please consult a licensed financial services professional.

The contents of http://free-financial-money-magazine.blogspot.com are provided for informational and entertainment purposes only, and should not be construed as advice. This material is not intended to provide, and should not be construed as providing individual financial, investment, tax, legal or accounting advice.

While the information shared on this website is believed to be accurate and reliable, the owners/operators of this website specifically disclaim all warranties, express, implied or statutory, regarding the accuracy, timeliness, and/or completeness of the information contained herein. Individuals leaving comments on this site are solely responsible and liable for the contents of their comments. Because this website is intended to provide general information only, you should discuss your specific needs with a qualified licensed financial services professional.

Links to other websites are for convenience only, and are independent from http://free-financial-money-magazine.blogspot.com. No liability is assumed for any inaccuracies in the information or for the content of any linked websites. No endorsement or approval of any other products, services or information is expressed or implied by any information, material or content referred to or included on, or linked from or to this website. No liability is assumed for incompatibility, non-suitability, viruses or other destructive/disruptive components on or from such websites.