How Much Information Do You Need?

You have decided to buy some stock or mutual funds, but wonder which one to buy. You need more information so you call your broker for advice. A so-called "full service" broker will bury you with all kinds of reports, analysis sheets and other pretty pieces of paper, but will probably try to sell you something that makes him the most commission.

Let's see. What does Wall Street think you should know? Of course, you will want a company that is currently favorable or "hot" ? like WorldCom used to be. Then you need to look at their financial statement that has been audited by a big accounting firm. ? like Arthur Andersen. You really should check to see if they have any big outstanding financial obligations that have little asterisks next to them in the Annual Report ? like under funded pension plans.

Of course you will want to get their financial statement to check their P/E ratio. That's Price/ Earnings or how many years of earnings it will take to make back the price of the stock today. The lower that number the better. For many years the average has been about 14. If it is above 20 or 30, well ??? We won't factor in the rate of inflation that will dilute the buying power year after year. And there are lots of other numbers like this Wall Street says you should be studying.

Maybe it is easier to buy a mutual fund. You can go to Morningstar for every bit of information about a fund you can think of. They will show the breakdown of the funds' portfolio, but that can easily be 6 months old. They do have those star ratings. From one to 5 stars, but I can't recall seeing any one star funds and hardly any 2 stars. Why? Well, I think they don't want to offend the fund manager even though he is not making money for his clients.

In fact, they love to give 5 stars to funds that have had losing years one after another. Unfortunately some of their information is out of date. They do list all the stocks the fund owns, but the fund may have sold them so you can't tell for certain what they are investing in.

Brokers want to send you reports, graphs, company updates, interim reports and I don't know what all, but stop and ask yourself, "If I can get this so can everybody else so what good is it?" Now you've got it. None. All that information will not tell you that after you buy it it will go up ? and that's all you want to know.

Basically there are two things you want to know. 1. Is it going up? 2. If it goes down where do I sell it to protect my capital? That's all the information you need.

Al Thomas' book, "If It Doesn't Go Up, Don't Buy It!" has helped thousands of people make money and keep their profits with his simple 2-step method. Read the first chapter at http://www.mutualfundmagic.com and discover why he's the man that Wall Street does not want you to know.

Copyright 2005

In The News:

I would always recommend mutual funds over individual stocks: Anand Rathi  LivemintThe effort needed to manage individual stocks is much higher than the effort required for mutual funds.Anand Rathi talks about the ongoing economic slowdown ...
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Top 5 bluechip stocks bought by mutual funds in August  The Financial ExpressEven as the stock market remains muted amid the ongoing slowdown, mutual fund managers have made some notable changes in sector and stock allocation.
What mutual fund managers are doing in the current market?  Economic TimesThese are trying times for the mutual fund managers. A bleak economic scenario coupled with countess stark data points have severely impaired the sentiment ...
Apple Stock Appeals To These Shrewd Mutual Fund Managers  Investor's Business DailyIn this excerpt from a new IBD profile of $559 million Alger Focus Equity Fund, the savvy fund managers explain why they like Apple stock.
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The Best Value Funds  Morningstar.comValue is striking back--for now. These value-focused funds all earn Morningstar Analyst Ratings of Silver or better.
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Big relief for stock market, equity mutual fund investors; Enhanced surcharge withdrawn  The Financial ExpressThe FM has announced relief from the enhanced surcharge on the long term and short-term capital gains arising in the stock market transactions.
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Is Vanguard Emerging Markets Stock Index Admiral (VEMAX) a Strong Mutual Fund Pick Right Now?  Yahoo FinanceLooking for a Non US - Equity fund? You may want to consider Vanguard Emerging Markets Stock Index Admiral (VEMAX) as a possible option. VEMAX has no ...
Good time to invest in India with a long-term view: Mark Mobius  Moneycontrol"India will continue to grow in the long-term, but there is a lot of confusion w.r.t taxation," Mark Mobius, founder of Mobius Capital Partners LLP said in an ...
These two key portfolio diversification strategies can help you buffer stock market risk  MarketWatchStories resonating with MarketWatch readers this past week.
IBD 50 Stocks To Watch: Essent Near Buy Point As Business Booms  Investor's Business DailyEssent Group, featured in today's IBD 50 Stocks To Watch, could benefit from the Fed's rate cut. The leading growth stock is also close to a buy point.
Strategic Value Investing: Value Investing in Mutual Funds  Yahoo FinanceCan you still be a value investor if you have turned to mutual funds or exchange-traded funds? The authors of "Strategic Value Investing: Practical Techniques of ...
Mutual fund investors keep faith in stocks despite market rout  LivemintMumbai: Investors in Indian equity mutual funds bought more last month, unfazed by the selloff that saw the nation's $1.9 trillion market log its worst July in 17 ...
Auto ka time aayega? Experts positive about auto stocks despite alarming August sales numbers  MoneycontrolThe sales numbers are alarming and challenges for the sector are mounting. At first glance, it looks logical to stay away from auto stocks.
What India's biggest mutual funds bought and sold in July  LivemintInvestors in Indian equity mutual funds bought more last month, unfazed by the selloff that saw the nation's $1.9 trillion market log its worst July in 17 years.
Penny Stocks To Billions? Only Two Rare Examples  Investor's Business DailyThe idea of turning pocket change into a billion bucks is alluring. But this mirage of penny stocks is also nearly a complete fantasy.
Goldman Sachs Finds 5 Top Stocks Mutual Funds Have Loaded Up On  24/7 Wall St.To say that mutual fund portfolio managers tend to follow the herd is an incredible understatement, and it always has been. While publicly they sometimes seem ...
Is it time to stop investing in equity mutual fund schemes?  Economic TimesIt is difficult to predict the market but many pundits feel it clearly needs some firm signal from the govt.
Diversify your portfolio by investing a portion in US-focused mutual funds  MoneycontrolDeveloped markets such as US have delivered significant returns over market cycles.
MF shopping list: Top 30 stocks that fund managers bought & sold in June  MoneycontrolMutual funds increased allocation to private banks, consumer, utilities, technology, NBFCs, retail, metals and PSU bank stocks in June, an ICICIdirect report said.
Top 10 stocks that mutual fund managers bought and sold in March 2019  Moneycontrol.comData for equity flows into mutual funds for March came as a breather after a weak February. An increase in net inflows in equity and income category led to the ...
Why picking the right mutual fund is key in a tough market  LivemintWhy have mutual fund (MF) returns fallen? Mutual funds primarily invest in equity (stocks) or debt (bonds). On the equity side, mid and small cap MFs have given ...
Should you invest in international mutual funds?  LivemintIf you were to sort all equity mutual funds available for retail investment by their one-year performance, international funds would come on top. The best ...
Invest in reliable outperforming mutual funds: Here are 8 of these  Economic TimesThese funds tend to score well on risk-adjusted metrics and hold dependable stocks in their portfolios.
Top 30 stocks that fund managers bought & sold in July; do you own any?  MoneycontrolMutual funds net bought Rs 14,846.75 crore worth of shares last month. Their inflows into equity funds also improved to Rs 8,113 crore in July, rising nearly 6 ...
What India's three largest mutual funds bought and sold in June  Economic TimesHeres what the top three asset managers bought and sold last month.
Consider investing in direct stocks only if you can monitor portfolio proactively  LivemintDirect stocks can be considered if you have the ability to do research to identify the stocks to be bought as well as to be sold.You should be revisiting your ...
When equity mutual funds offer negative returns, here’s what you do  Economic TimesThe need of the hour is to stay insulated from the panic in the market.
Mutual funds’ exposure to this space at all-time high; should you buy?  Economic TimesMoney managers on Dalal Street continued to shower affection on private banks for the ninth successive month as their exposure hit 19.90 per cent in June, ...
Best mutual funds to invest for 3 to 4 years  Economic TimesIf you have any mutual fund queries, message on ET Mutual Funds on Facebook. We will get it answered by our panel of experts.
What India's top three mutual funds bought and sold in March  Economic TimesIndias largest money manager held 1.5 trillion rupees in equities.
Here are a few mutual funds that stocked up on YES Bank in Q4FY19  Business StandardShares of YES Bank tanked 30 per cent in trade on Tuesday, after the bank reported a massive Rs 1,507 crore loss in the fourth quarter of financial year 2018-19 ...
Sensex's rise from 20K to 40K: 5 lessons for equity mutual fund investors  Economic TimesWe look at some critical lessons that equity fund investors learnt during the journey of Sensex reaching 40K.
Flows into mutual funds revive in May as Modi win seems to spur risk demand  LivemintFlows into Indian equity mutual funds in May rebounded from the smallest in 31 months as Prime Minister Narendra Modi's comfortable electoral win spurred ...
Mutual fund investors showing great appetite for assuming risk: Dhirendra Kumar  Economic TimesOne would have thought that new investors who came into mutual funds will be running away. But they are getting into riskier category of funds and the scale of ...
Actively-managed large cap mutual funds poised for a comeback  Economic TimesDefying predictions of their imminent irrelevance, some actively-managed large cap mutual fund schemes have bounced back to the top of the return chart.
Mutual funds shooting themselves in the foot?  Economic TimesWhat if banks take a leaf out of Kotak and HDFC Mutual Funds' decision to direct investors to come another day to get their money instead of paying them on the ...
How concentrated is your mutual fund portfolio?  LivemintA concentrated portfolio can backfire badly if the fund manager's strategy goes wrong.A portfolio with few stocks can fall sharply if share prices of most stocks in ...
For long-term investments, index funds make more sense, says Pratik Oswal of Motilal Oswal AMC  Economic TimesMotilal Oswal AMC, a fund house know for its active, focused investment approach, has surprised mutual fund industry with the launch of four passive funds ...
What India's top three mutual funds bought and sold in May  LivemintInflows into Indian equity mutual funds in May rebounded from the smallest in 31 months as Prime Minister Narendra Modi's comfortable electoral win spurred ...
6 bad money habits that investors should give up  Economic TimesSome habits can exact a heavy toll on your finances. We look at a few common ones that you should give up.
Mutual fund SIPs don't make equity investing risk-free. Here's why  Economic TimesSIPs do reduce the risk of market timing & allow investors to buy more units when their price falls.
A young investor’s guide to mutual funds  Economic TimesMany young investors, who are barely a year or two old in their career, are eager to start investing in mutual funds. ETMutualFunds.com receive many queries on ...
Is it time to switch to index mutual funds?  Economic TimesBy Rishabh Parakh It is one of the hottest topics debated these days: is it time for mutual fund investors to switch to passively-managed index funds from their ...
How income from stocks and mutual funds are taxed for an individual  Moneycontrol.comCapital gains from transfer of unlisted share are considered as STCG where period of holding is less than or equal to 24 months, and LTCG when holding period ...
SIPs in equity mutual funds are giving negative returns. What should you do?  Economic TimesSIP returns for many investors in mid- and small-cap funds in the last one year are negative after the sharp market correction. The key is to choose a fund wisely ...
Value mutual funds have given good returns over long term but can underperform in short term  Economic TimesOver the years, the benefits of value investing have been espoused by several market gurus and fund managers. Discussions around this investing philosophy ...
Stay away from stock tips  LivemintIf taming the stock market was easy, everyone would do it.Losing money in market is real and facing volatility is part of the deal.
Equity mutual funds are offering negative returns. What should investors do?  Economic TimesAll equity mutual fund categories have been offering negative average returns in the last one year. Small cap and mid cap schemes were hit the most, with ...
Should you invest in algorithm-based quant mutual funds?  Economic TimesQuant funds work on a data-driven model that relies on a mix of parameters and algorithms to identify the right stocks at the right time. But can they beat actively ...
Understand difference between large-cap, mid-cap and multi-cap mutual funds when investing  Economic TimesExperts say large and mid cap mutual funds have carved a niche for themselves in portfolios.
Can mutual funds give multibagger returns like stocks?  Economic TimesStocks can be multibaggers. They can offer extraordinary returns in a very short period. Can mutual funds ever do that? This was a question thrown at Rajeev ...
What India's top three mutual funds bought and sold in February  LivemintStock funds took in a net ₹5130 crore, a 17% drop over January, data from the Association of Mutual Funds in India show .Here's what the top three asset ...
What top mutual funds bought and sold last month  LivemintMumbai: Inflows into Indian equity mutual funds in January were the smallest in two years as heightened market volatility and political uncertainty cooled ...
Fund managers bet over Rs 8.5K crore on these 6 stocks in July; do you own any?  MoneycontrolFund managers added large-cap private banks, utilities, energy and select FMCG names.
Stick to MFs if you lack knowledge on stocks  LivemintWhile equity is surely the way going forward considering your age and the financial goals, how you buy in equity is important.Direct stocks work very well if done ...
Top 25 equity mutual funds failed to deliver positive returns in June  Economic TimesNEW DELHI: Top 25 mutual fund schemes, managing retail money in excess of $1 billion (Rs 7,000 crore) each, failed to deliver positive returns in June.
Govt tweaks rules, increases limit to disclose investment in stocks, mutual funds for employees  Economic TimesNew Delhi: The Centre has increased the over 26-year-old monetary limit on disclosure of investment in shares and mutual funds by employees to six months of ...
MF portfolio doctor: Babji needs to exit direct investments in stocks, take mutual funds route  Economic TimesThe Portfolio Doctor assesses the health of the fund portfolio, examines the schemes and their suitability with regard to the goals.
Budget 2019: what can mutual fund investors expect today?  Economic TimesSome fund managers say the government can offer exclusive tax deductions for the product if it wants to increase investor participation in mutual funds.
Why do wealth managers recommend multi cap mutual funds?  Economic TimesMany wealth managers believe multi-cap funds are a good starting point for long-term investors, specially those using SIPs for wealth creation.

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