Daily Investment Tips

I found some interesting comparisons of returns of index fund and mutual funds.

From motley Fool website;

During the 1990s, the S&P 500 has provided an annualized return of 17.3%, compared with just 13.9% for the average diversified mutual fund.

And From Yahoo

In 1998, for instance, 85 percent of all mutual funds that were set up to beat the S&P 500 failed to meet that goal. When you think about it, that’s an amazing statistic — eight out of ten mutual funds didn’t beat the market!

Investing in a stock index fund guarantees that you’ll never outperform the overall but an index fund might give investors a higher return because of their cost advantage. Index funds have lower or zero fees, they also don’t hire expensive equity analyst. All that saving is passed to investors.

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James C. Boogle is the founder of The Vanguard group,  a mutual fund that allows retail investors invest in the movement of S & P 500. The fund owns 500 stocks — all the companies that are included in the index.

James C. Boogle is a champion of investing in index funds. He believes index funds have three advantages over the traditional mutual funds.

The Advantages of Investing in Index fund.

Low Cost fees – Vanguard funds don’t charge commission fees to buy into the fund

Higher return to investor – Vanguard funds don’t hire expensive stock analysts, don’t rapidly move in and out of position. This saves on operational cost. The money saved is moved that is distributed to investors as gains.

Stable Return. Vanguard fund never claims to beat the index. The returns are average but stable.

written by Constantine Njeru \\ tags: Amp, Boogle, Champion, Index Fund, Index Funds, Investment Tips, Investor, James C, Money, Mutual Fund, Operational Cost, Retail Investors, Stock Analysts, Stocks, Traditional Mutual Funds, Vanguard Fund, Vanguard Funds, Vanguard Group

One idea of boosting your finances is to have a passive income stream. A passive income stream is a venture that brings you money without requiring you to manage it on day to day basis.Once you set it up you can get on with your normal life and you wont need to get involved in running it.

The following is a list of some ideas that can generate you passive income:

1. Investments that Pay Dividends – A good example of passive income stream is stocks. Stocks such as mining stocks, Oil stocks & Banking stocks pay dividends on regular basis. Look for individual stocks and bonds or index funds that pay good dividends, then sit back and watch the money roll in.
2. Writing a Book – If you have the talent this could be a great passive income idea. Once you have written a book and you have found a publisher you can sit around and watch the royalty checks flow into your bank. Just note it is not as easy at it sounds, getting a publishing is never easy but for those with talent and have faith in their work it is worth the struggle.
3. Rental Properties – If you have the capital then this is another sure passive income idea. Once you have developed the properties you can hire a property management to collect rent on your behalf.
4. Set up a website – The websites business is not as easy as it used to be. But if you have the energy you can set up a website, buy your own domain or get a free site at blogger. Once you have written substantial content you can join google adsense program. Google will you pay based on number of clicks. If you are successful this can be a descent passive income stream.
5. Develop and License a patent. – It is not always necessary to develop the product, you can license the patent or idea to a manufacturer who does all the production and marketing. The manufacturer pays you royalties for your idea. The royalties received from licensing agreements can be lucrative with the right product.

written by Constantine Njeru \\ tags: Amp Banking, Blogger, Dividends, Google, Income Investments, Income Stream, Index Funds, Licensing Agreements, Money Roll, Oil Stocks, Passive Income Ideas, Patent, Property Management, Rental Properties, Royalties, Royalty Checks, Stocks And Bonds, Struggle, Substantial Content, Writing A Book

Burton Malkiel is the author of the classic investing book, A Random walk down wallstreet, his latest book is Elements of investing.

The following is an index of some of Burton Malkiel Investing ideas and investing tips.

1. Burton Malkiel Number one Investing Idea is simple – It all starts with saving. The earlier you do it the better.”
2. Burton Malkiel Advise on Buying a Bigger Home – It is not worth it. Buying a bigger homes means spending more money to service the mortgage and less money left for saving and investing.
3. Burton Malkiel Advise on managing risk – To make money you need to take some degree of risk and the way to reduce risk is by being very well diversified.The best way to go about this is to buy index funds.
4. Buy and Hold – just like many other investment advisors who started their careers in 1970s, Burton swears by the mantra of buy and hold – over the long haul the stock market will do what it’s always done: namely be in a long-term up trend.
5. Take advantage of tax efficient retirement funds.

written by Constantine Njeru \\ tags: 1970s, Burton Malkiel, Careers, Degree Of Risk, Elements, Index Funds, Investing Ideas, Investing Tips, Investment Advisors, Long Haul, Managing Risk, Mantra, Money, Mortgage, Random Walk, Retirement Funds, Stock Market