F' it, be a Conscious Investor
The depth of my investigation into a fund/stock is often limited but I do like to think I invest with some moral guide points.
I invest in U.S. Organizations when the economy is having issues and internationally when we are doing good. First, for the bounce back effect gaining me larger profits and second, we like to help an underdog. This is a reasonable risk, not 40:1 odds.
I tend to pick more small- and mid-cap funds which provide for developing businesses.
I don't limit myself to companies I will or won't invest in but I am a big fan of segment based investing (e.g. Technology, pharmaceutical) which is why I am disappointed to see we are heavily limited this year in our options for industry specific funds in many company 401k offerings.
Fund fees (what the fund manager is taking as payment) are limited as far as a 401k is concerned due to restricted options… but if I am debating two funds, I do take this into consideration.
So, yes, I let my conscience talk to my checkbook during evaluations because I want to know that I am not tied to 'Baby Labor, Inc.' because a big win for me is meaningless without some positive impact on the world. That being said, I will not invest in the 'Sinking Environmentally Friendly Fund'.
Wednesday, January 18, 2012
Mutual Fund 401k Basics
Front Page Information (the basics)
Mutual funds are investments made up of smaller investments inside based on the focus of the mutual fund. A fund is managed by the a fund manager (Fidelity) and a group of people at the company are responsible for adding and removing stocks to the mutual fund based on the purpose of the fund and stock performance. Then, they take your money in the fund and automatically invest it for you.
Large Cap (4 options) Funds that invest in big corporations, generally they have a value of $8 million or more. Generally these are the big, steady companies which will not have huge growth in performance but are less volatile. They invest in companies like Apple, Exxon, Discover, Google, Red Hat.
Mid Cap (3 options) Funds that invest in companies valued between $1 million and $8 million. They invest in companies like Microsoft, Best Buy, Abercrombie & Fitch, Oracle.
Small Cap (3 options) Generally invest in companies with a value under $1 million. These are going to be more active as far as value because companies will grow quickly or die in most cases. They invest in companies like Regis, Wesco, Spectrum Brand Holdings, Team Health Holdings. Most you will not be familiar with.
International (2 options) Mutual funds that invest in company stocks around the world.
Specialty (1 option) Specific categories to invest in. The only option here is an investment in real estate organization's stock funds.
Blended (many options) This is the auto-pilot option, pick the year you expect to retire and the Fidelity team adjusts the risk of the fund as it approaches your retirement. (e.g. They search for large gains from higher risk options while you are in your 20s & 30s. As you Are in your 50s the fund focuses on steady, small growth.)
Income (1 option) This is a bond investment option of Corporate bonds. More secure in troubled times than stock investments but also limited in gains based on this.
Short-Term Investments (1 option) This is a Money Market account, safe, secure, akin to a savings account.
I used the Fidelity website & Yahoo Business pages as reference for this.
Mutual funds are investments made up of smaller investments inside based on the focus of the mutual fund. A fund is managed by the a fund manager (Fidelity) and a group of people at the company are responsible for adding and removing stocks to the mutual fund based on the purpose of the fund and stock performance. Then, they take your money in the fund and automatically invest it for you.
Large Cap (4 options) Funds that invest in big corporations, generally they have a value of $8 million or more. Generally these are the big, steady companies which will not have huge growth in performance but are less volatile. They invest in companies like Apple, Exxon, Discover, Google, Red Hat.
Mid Cap (3 options) Funds that invest in companies valued between $1 million and $8 million. They invest in companies like Microsoft, Best Buy, Abercrombie & Fitch, Oracle.
Small Cap (3 options) Generally invest in companies with a value under $1 million. These are going to be more active as far as value because companies will grow quickly or die in most cases. They invest in companies like Regis, Wesco, Spectrum Brand Holdings, Team Health Holdings. Most you will not be familiar with.
International (2 options) Mutual funds that invest in company stocks around the world.
Specialty (1 option) Specific categories to invest in. The only option here is an investment in real estate organization's stock funds.
Blended (many options) This is the auto-pilot option, pick the year you expect to retire and the Fidelity team adjusts the risk of the fund as it approaches your retirement. (e.g. They search for large gains from higher risk options while you are in your 20s & 30s. As you Are in your 50s the fund focuses on steady, small growth.)
Income (1 option) This is a bond investment option of Corporate bonds. More secure in troubled times than stock investments but also limited in gains based on this.
Short-Term Investments (1 option) This is a Money Market account, safe, secure, akin to a savings account.
I used the Fidelity website & Yahoo Business pages as reference for this.
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