For your third project, you'll want to identify three open-ended, no-load mutual fund companies. You'll learn all you need to know about these by reading chapter 16. All of the major mutual fund companies have a "family of funds." You'll want to look over the family of funds in each of the mutual fund companies and tell me: Of the three mutual fund companies that you have identified, explain which company you will use as your primary investment vehicle and why you chose that one over the other two companies. The main selection criterion should be the effectiveness by which this company will allow you to implement your Investment Strategies (see Lecture Notes in Module VIII). Next, tell me which of "members" of that company's family of funds you'll invest in and why. You'll need to know something about the principles of investing before you're able to adequately explain your choices. Reading about mutual funds in your textbook would be very helpful.
For example, you might find the following three open-ended, no-load mutual fund companies:
Let’s suppose that you go to the Internet, check out the Web site of each company, read a little about them and come to the conclusion that Bill’s Investment Co. would be best for you. Tell me why you came to this conclusion.
Bill’s Investment Co., Inc. will have a family of funds. You can deposit you money in any of the following funds:
(Actually, there will be many more, some containing various combinations of these assets.)
Tell me, of this family of funds in Bill’s Investment Co., in which three funds will you invest your money – and why. Keep in mind that you’ll want to take into account those seven investment strategies. (Points will be lost for not mentioning all 7)
Your essay should be between 3 and 5 type written pages (double spaced). Please do not copy and paste anything from the Internet (descriptions, pie charts, graphs, etc.). Post questions and comments to the forum in the DISCUSSION section entitled Project 3.
For example, go to
https://www.fidelity.com. This is a well known investment company know as Fidelity. It has lots of Investment Products -- a term they use for types of financial assets. Click on Investment Products, then, from the drop down menu, click on Mutual Funds. On the new page, find the Funds by Type area, then click on Domestic Stock Funds. Find the matrix of size & style and click on Mid Cap Blend. A definition of that term will pop up. Don't pay too much attention to the term value-oriented stocks, this simply means a good company that their financial analysts believe have a better chance of going up than the others. The term blend simply means a combination of sound, stable companies that pay a good dividend (not really blue chips because they're mid-caps) and growth stocks (ones that probably pay low or no dividends). Click on the term Research funds in the bottom of that box. A list of stock "ticker symbols" will pop up. Click on the symbol (e.g. UMPIX). Scroll down the page and learn about the fund's strategy, risk and other information. Assuming Fidelity was the investment company you chose from the three you investigated, pick three of these funds and tell me why you chose those three. Remember, you'll want to implement your investment strategies via these funds, so pick a stock fund, a bond fund, and perhaps a combination stock/bond fund. Although you'll want to weigh your portfolio more heavily toward real assets (maybe 80%/20%), don't get too conservative.