Tag Archives: funds

Few Categories of Funds You Need to Know

Funds are broken down into different categories. Fund category is a way of differentiating mutual funds in accordance to investment goals and main investment characteristics. This categorization permits investors to expand their money around in a mix of funds with different risk and return features. With stock funds, the basic categories are defined by the size of the companies in which the fund invests, large-cap, mid-cap and small-cap, and investment style, value, growth and blend of value and growth. In addition, specialty stock funds and international funds provide additional opportunities.

In this article, you will learn a few of the fund categories to help you further widen your knowledge about stock funds.

  1. Stock fund is categorized by size

You might want to buy stock funds that invest in companies of different sizes, such as small-cap, mid-cap and large-cap companies, for the best diversification process. You can actually do this by selecting three different funds that invest in each sized company, or you can pick one wide fund that invests in all of them at once, maybe through a stock index fund.

  1. Stock fund is categorized by type

You could invest in a fund that chooses only growth stocks, if you think that small growth stocks will outperform the market. On one hand, you could choose a fund that invests in value stocks, if you truly feel and think that they are the way to go.

  1. Stock fund is categorized by region

You might also want to buy stock funds that invest in companies, not just in your country, but internationally as well. You can actually do this by adding an international fund to your mix. Just always make sure that you are completely aware what you are buying. An international fund might invest in stable regions like Europe, or it might invest in riskier developing market regions, such as Latin America, Eastern Europe and mainland Asia, or it could be all of the mentioned regions.

  1. Stock fund is categorized by sector

You could also try to invest in a sector or a specialty fund that holds stocks in just one industry, such as energy, technology or financial. There is nothing wrong with placing a percentage of your total stock holdings to such funds, as long as you remember that a hot sector one year could actually crash the succeeding year. If you do choose to purchase such funds, make sure the rest of your stock fund holdings are well diversified. That will restrict your overall risk.


Earnings Release Week


This week will be a busy week up ahead for the market community, a lot will be put in the spotlight but the one thing that will stand out is the geopolitical turmoil the US created after the strikes it made in Syria last week.

Financial Institutions and Banks

This will be the first of the big weeks in the financial market, and for this week, all the highlights are focused on the top financial institutions and banks. The scheduled reports for this week, this Thursday, are from prominent banks and financial institutions JPMorgan Chase & Co, Wells Fargo & Co, and Citigroup Inc.

The banks have been on a rollercoaster of a ride from the past months under the new Trump administration. Some other factors that may have triggered the fiscal stimulus hopes for the financial institutions are; deregulations talks and the Fed’s decision to be sterner and hiking the interest rate for a couple of times this week.


Inflation off The Bat

There will also a big debacle for Friday because of the exclusive inflation data that will be unveiled; the data include whole March’s progress. With the Fed’s recent hikes and its latest meeting last Wednesday hinted that if the inflation data continue to roll, the central bank may and will increase another three or four interest hikes this year.


G-7 Meets in Italy

The G-7 is a group of countries that consists of Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States. These countries have started a 2-day summit meeting today in Italy after the alarming attack the US made against Syria, investors and the market community continues to keep track on what would happen in the growing geopolitical crisis.

Then entirety of the 2-day meeting is expected to be disclosed at a press conference dated this coming Tuesday Eastern Time.

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Investing Dictionary #3: Expense Ratio


Expense Ratio is a rare word to stumble upon, it is a word prevalent in-between companies and it varies on more private talks the market community has seen. So going back to Expense Ratio, it is actually a measure of what it costs an investment company to operate a mutual fund.

You may ask how expense ratio is determined; well according to the Investopedia: An expense ratio is determined through an annual calculation, where a fund’s operating expenses are divided by the average dollar value of its assets under management (AUM). Operating expenses are taken out of a fund’s assets and lower the return to a fund’s investors. It is also known as the management expense ratio (MER).


All You Need To Know About Expense Ratio

Expense ratio varies very differently on each type of fund, operating expenses vary widely. One of the biggest parts or the crucial component of operating expenses lies on the fee paid to a fund’s investment manager or advisor.

Further costs include recordkeeping, custodial services, taxes, legal expenses, and accounting and auditing fees. Investopedia makes a clear distinction between funds, “expenses that are charged by the fund as reflected in the fund’s daily net asset value (NAV) and do not appear as a distinct charge to shareholders.”


Funds to Keep In Mind

There are two different expense ratio fund; Index Funds and Actively Managed Funds are both type of funds to keep a list on. Index Funds usually carry very low expense ratios; the managers who oversee these funds are plainly repeating a given index, so the need to have a full management team on staff is deliberately discarded.

Actively managed funds, on the other hand, employs teams of research analysts examining companies as potential investments. By coming up with a team, creating and managing this team adds more costs that are then get passed on to shareholders in the form of higher and bigger expense ratios.

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What is the FCA?


If you’ve been around the Forex trading market, you’ve probably heard or saw FCA somewhere on those trading websites and what have you. First of all, FCA stands for Financial Conduct Authority; they are the regulator for over 56,000 financial services and firms and financial markets in the UK and the prudential regulator for over 24,000 of those firms.


What Does FCA Do?

FCA is the pioneer for the safer and more honesty financial market, they promote fairness and effectiveness for all consumers all over the world. FCA said, “It is our aim to make markets work well – for individuals, for business, large and small, and for the economy as a whole.”

The FCA started on April 1, 2013. They then started to grow and grow each year, regulating over 56,000 financial and the prudential regulator for over 24,000 of these firms. FCA governs 2.2 million people that are employed in the UK financial service who contributes 65.6 billion pounds in tax to the UK economy.


How Does FCA Do All The Regulating?

According to FCA’s website, this is how;

Our strategic objective is to ensure that the relevant markets function well and our operational objectives are to:

Protect consumers – we secure an appropriate degree of protection for consumers.

Protect financial markets – we protect and enhance the integrity of the UK financial system.

Promote competition – we promote effective competition in the interests of consumers.

The Financial Conduct Authority continues as a public body that is funded completely by the firms and financial service providers they regulate by charging those fees. They are also accountable to the Treasury, which is responsible for the UK’s financial system, and to the parliament.

Finally, they also work with several consumer groups, trade associations, and professional bodies domestic regulators, EU legislators, and a wide range of other stakeholders.

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The Types of Dollars in the World


We all know that the dollar is the native currency in the United States, but there are actually more countries that call their currency the dollar. These are some countries that share the same currency name with the land of the brave!

Canadian Dollar

Canadian Dollar or CAD for its ISC code is the currency people in Canada use! It is mostly represented as C$ to remove any confusion among other dollars, but often times it is also represented as $. Just like any other dollar CAD is also subdivided into 100 cents, CAD is one of the major Forex currencies and is currently the 7th most traded currency in the world.

The CAD, as of today, produces and circulates 5 cents, 10 cents, 25 cents, 50 cents, 1 dollar and 2 dollars. Unfortunately, the production for the 1 cent was discontinued somewhere around the year 2012, banknotes that the CAD produces and circulates are in the form of 5, 10, 20, 50, and of course 100 Canadian dollar. One more thing about the current Canadian bills is, they are made of polymer as of 2011, as opposed to paper for the previous years of production.


Belize Dollar

Belize Dollar or BZD for its ISC code is the major currency of Belize, it is represented as BZ$ for further distinguishing from other dollar currencies. This currency dates as far as 1976; it then replaced the current currency of the country which was the British Honduras Dollar. Like any other dollar, the BZD is also subdivided to 100 cents.

Along with the transforming of British Honduras on late 1976, it also replaced its currency to Belize dollar. It was freed from the British colony in late 1981, now it trades in the rate of BZ$2 to US$1.


Australian Dollar

One of the most popular dollar currency, the Australian dollar or AUD for its ISC code; like most of the dollar currency, AUD is also subdivided to 100 cents. It is commonly represented as A$ to disperse any further confusions.

The AUD was once known as the Australian pound in 1966. But after several years, 1983 to be exactly, the pound was then transfigured from pound to dollar. As of late, the AUD is one of the major currencies exchanged on the world’s Forex markets. It ranks as the 5th most traded currency just behind the USD, EUR, JPY, and GBP.

The AUD circulates coins at 5 cents, 10 cents, 20, cents, 50 cents, 1 dollar, and 2 dollars. While the current banknotes circulation it has is as follows; 5, 10, 20, 50, and 100. The banknotes circulated are all made from polymer instead of papers.


New Zealand Dollar

The New Zealand Dollar or NZD for its ISO code, the most common symbol the New Zealand dollar is recognized as NZ$. Like any other dollar currency, it is also subdivided to 100 cents. A common slang the NZD has is Kiwi, because of the kiwi bird that is present on their NZ$1 coin.

The NZD replaced the New Zealand pound at 1967, it has been pegged for a quite bit through a series of different currency pegs but has been allowed to float freely since 1985. The NZD is one of the major currencies exchanged on the world’s Forex markets. NZD currently circulates coins in 10 cents, 20 cents, 50 cents, 1 dollar, and 2 dollars. It also currently circulates banknotes are 5, 10, 20, 50, and 100 dollars.

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Trading Commodities


The commodity as the Merriam-Webster would define it;   an economic good: such as a:  a product of agriculture or mining agricultural commodities like grain and corn b:  an article of commerce especially when delivered for shipment reported the damaged commodities to officials c:  a mass-produced unspecialized product commodity chemicals commodity memory chips.

This simply puts the milk and orange juice we leisurely drink, from the means of energy to power up our homes and vehicles, commodities are a big chunk of our daily lives. In the world of investing, commodities are part of a diversified investment portfolio and they can also be traded in the global marketplace. Commodities are literally anywhere and everywhere in the world, they also garner billions and billions of dollars from investment every day.

Spot versus Future Commodities Trading

The spot price is defined as the current price of a particular market portfolio, in this case, a certain commodity, and can also be bought or sold for the most immediate delivery. One major thing to remember for spot price is that they are very susceptible and subject to extreme volatility. The main difference it has with future prices is that; future prices are increasingly higher over time and higher futures prices reflect carrying costs such as storage.

Commodities are very flexible as it is tradable both in a spot and in future markets. An increasing trend in the commodities community is trading individuals in the form of futures; this happenstance means that you won’t be buying or selling the commodity itself but rather a contract of a certain price by a stated date in the future.


Commodity Trading Round Up

Just like any other investment goal, we would want to buy low and sell high! The only caveats with trading commodity are; 1) Commodities are highly leveraged and 2) Instead of share, commodities traded in contract sizes instead. One more thing to remember when you start trading commodities is that investors can buy and sell positions whenever the markets are open.

The bottom line is, commodities open a wide variety for your investment portfolio. It expands every portfolio from the usual stocks, bonds, and mutual funds. Every investment carries risks, but what set trading with commodity apart is the alluring high leverage it brings on the table.

Trade12Basics is a daily updated blog about the happenings in the stock market, financial realms, and the world economy. It is also a place to find basics in trading and other sorts of tutorials that you can add to your knowledge. Subscribe to further educate yourself about the field that you are to partake in. Trade12Basics  is here for you

Why do you need an investment plan?

You can easily get discouraged with investing if you don’t know where you are heading to, thus, it is necessary to  have a concrete plan. An investment plan serves as your stairs in attaining your financial goals. But the most basic thing for you to recognize is your current financial state and what you want to do with your coming investments.

In creating your investment plan, you have to set your specific goals, however, they have to be realistic. You can’t aim for $100,000 return of  investment if you haven’t invested at all. You have to decide where does the money you acquired from your investment go. In some cases, you may want to buy a house, a luxurious car, spend it on travel or you just want to retire early. Take note that the bigger the goal is, the larger the investment must be.


Before you invest or make an investment plan, one of your concerns should be the amount of money or funds you can honestly invest. It is necessary to estimate how much of your money you can save and you can spend. You have to picture in your mind the amount of money you can allow yourself to spend and you must obey the figures you have set as much as possible. You may check the available money that you have, your expenses and your emergency funds perhaps.

After you have set your goals, proceed on choosing your investment strategy. Investment expert suggests that if you want long-term goals, you should choose more aggressive and higher investments. On the other hand, if you are only after short term goals, then you might as well pick the conservative investments with lower risks.

As the theory says, you can deal with more risks if you are young due to the fact that you can handle any loss since you have more time to recover. Therefore, younger investors are advised to take the aggressive investments rather than the less aggressive ones. Remember, when you take less, you make less, so you become cautious about the risks which are significant or not.

Following your investment strategy is your investment policy statement. This will help you in your investment decisions and will serve as an outline for your investment adviser. The investment policy statement must include your specific goals and the strategies you may use to meet your plan. You can also indicate your expected return of  investment in a certain time together with the risks you are willing to take.


If you can’t meet your projected savings, then you may modify your goals. Figure out the investment plan that suits your needs and if you have to learn from the basics, do it. It is also wise to check your goals from time to time so you can make the necessary adjustments.

In some instances, a financial plan and an investment plan are used interchangeably. However, a financial plan deals more on your personal plan in areas including college and risk management. A financial plan is an evaluation of your present and future financial state which is used to perceive your feasible income, asset values and withdrawal plans in the futures.

When you have an investment plan, you are prepared for the possible scenarios in the future. It gives you an overview about market possibilities and it helps you reach your goals accordingly. So what are you waiting for? Start your investment plan as soon as possible.