Harry Perler - CFP, CEO

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Harry Perler, CFP

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" Preparation is everything. Noah did not start building the ark when it was raining. "

Warren Buffett

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My clients regularly receive current information on the economy and other financial matters.  If you would like to participate in receiving such information, please call our office at 604.468.0888 or send us an email at expert@perlerfinancial.com with “INCLUDE ME” in the subject line
Home Frequent Questions
Frequently Asked Questions PDF Print E-mail
Here are some questions that we are asked on a regular basis...

Are Mutual Funds for me?
How Do I Know How My Mutual Fund is Doing?
What Are the Costs for Mutual Funds?
So, Are Mutual Funds for Me?


Are Mutual Funds for Me?

To be a successful investor you don't need $75,000, years of experience, subscriptions to the best investing newsletters, and the time to read them. All you need is a good mutual fund manager.

Mutual funds are composed of investors just like you who have mutually decided to pool their money and hire a professional investment manager. You don't even have to round up all your friends and convince them to invest with you. Existing mutual funds are offered by investment companies, banks, trust companies, credit unions, insurance companies, even professional organizations.

The advantages of mutual funds are professional management and investment diversification. By not centralising all your funds in one specific investment, you reduce your risks while increasing the possibility of gains. Because mutual funds are generally regarded as long-term investments, you don't have to worry about them daily.

Mutual funds have differing objectives. Some may concentrate on speculative growth investments, others on preservation of capital and a steady income. The trick is to find a fund which shares your objectives. Mutual fund portfolios may include common stocks, preferred shares, bonds, treasury bills, precious metals, and real estate in any combination.

Day-to-day investment decisions are made by the fund manager who decides the asset mix within the objectives of the fund.

How Do I Know How My Mutual Fund is Doing?

The total value of the fund is called the net asset value, or NAV. This is calculated by taking all the fund's investments at market value and subtracting management fees. Dividing the NAV by the number of units sold determines the net asset value per share, or NAVPS.

The NAVPS is calculated on a daily or weekly basis (except for real estate funds, calculated monthly) and printed in the mutual fund tables of The Financial Post or the Report on Business section of The Globe and Mail.

You will also receive quarterly and annual reports on the performance of the fund and, if you choose automatic reinvestment of any proceeds, notices of the additional shares purchased.

What Are the Costs for Mutual Funds?

There are varying costs for mutual fund professional management. There may be commissions on the purchase of units, which are payable either to a broker or directly to the fund management company as a "front-end load". Front-end loads are usually negotiable. There may be redemption fees for withdrawals called "back-end loads" calculated on your original capital investment or the market value. Back-end loads usually decline the longer you keep your money in the fund.

There are on-going management fees charged by the fund manager for research, buying and selling investments for the fund, and issuing reports. These generally range from 1% to 3% of the fund's total assets for the year.

Fees do not always reflect the performance of the fund. Since mutual funds are generally regarded as long-term investments, annual management fees are usually more important than loads.

So, Are Mutual Funds for Me?

Professional management, diversification, and long-term gains are the benefits of mutual funds.
Your financial advisor or broker can advise you on which mutual funds are best for you and your investment goals.

If you prefer spending time with your children or learning to play the zither to poring over daily investment reports, then mutual funds may be for you.


 
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