Mutual Funds
Introduction and Background of Mutual Fund Industry Over the past 75 years, there has been no better way to experience financial growth than to have been a long-term investor in the U.S. stock market. Even though they have experienced some dramatic downturns, stocks, which are ownership shares in public corporations, have outperformed all other types of investments including bonds, CDs and U.S. Government securities and they have stayed ahead of inflation. Like the stock market, successful investing is never a sure thing, since you can't predict what the value of your investment or your rate of return will be at any point in time. Yet, despite this uncertainty, the stock market remains among the best choices for long-term investing.Stocks or equity securities represent ownership shares in a company and the right to share in both its profits (stock dividends) and its growth (rising share price). For both of these reasons, stocks have become an "investment of choice," particularly for millions of investors looking for capital appreciation. While the stock market is known for its ups and downs, and individual stocks can rise or plummet overnight, as a whole, stocks have delivered a larger return on investment over the long run th
How would you feel? If the fund managers have been selfish all along and not exhibited the responsibility that we entrust them with then who is to blame? In the first paragraph of his classic 1985 book, "Winning the Loser's Game," Charles Ellis writes, "Contrary to their often articulated goal of outperforming the market average, the nation's professional investment managers are not beating the market; the market is beating them. Our business is one of principle and discipline. Market timing is an investment technique involving short term, "in and out" trading of mutual fund shares, which has a detrimental effect on the long-term shareholders for whom mutual fund investors are designed. " His office, after a several month investigation, focused on two specific abuses prevalent in the industry: Late trading and Market timing. That profit dilutes the value of shares held by long term investors. Investors do not submit orders directly to funds, but to any one of several different types of intermediaries. The SEC, Investment Company Institute, and Congress as well as thousands of investors will be sure to make the necessary changes to protect investors in the future. Late trading involves purchasing mutual fund shares at the 4:00pm price after the market closes. SEC Chairman Donaldson has laid out a blueprint for regulatory reform. Late trading, while a more serious offense, seems to hurt investors much less. This concept is a little confusing. Some have spoken out denouncing the proposal to place blame upon directors, or the fund governance system. Intermediaries will require investors to submit purchase orders at an earlier time in the day to obtain the 4:00 p.
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Acceptance Essays
