Mutual Interest Data Service, Ltd.
Performance - Data Report - Distribution Model
Retirement Investments 101: Mutual Funds shows the average investor where and how to find value among thousands of fund choices being offered. The third edition has been expanded to include 32 exclusive and valuable reports.
A mutual fund is an investment regulated by the Securities and Exchange Commission and listedon the NASDAQ market. A mutual fund is an investment company that collects funds from investors and pools the assets for the purpose of building a portfolio of securities according to established objectives. The mutual fund portfolio categories include large-cap, small-cap, mid-cap, equity income, specialty, real estate, technology, bonds, balanced, etc. Top mutual funds vary month-to-month, year-to-year. The facts that determine what is a top mutual fund are performance, fund category rank, return, and long-term gains.
1. Daily Performance: percent of change in a mutual fund's net asset value (share price). The change compares the opening share price to the closing share price. The change is then added or subtracted from the year-to-date return percentage.
Example: Assume the "opening share price" is $10.00, and the "closing share price" is $10.20. The next market opening; the performance would show a 2% "gain".
Every mutual fund is assigned to a specific fund category. If mutual fund's objective is investing in Large-Cap Core size companies; the fund category would be Large-Cap Core. Presently, there are 969 Large-Cap Core funds. The rank, percentage, is based on how successful or unsuccessful a mutual fund's performance is compared to all of the mutual funds the same category. If a mutual fund's rank is 10%, that fund's category rank is in the top 97 mutual funds serving that category.
2. Distribution: The dividend and interest earned by a mutual fund is the income distribution. A fund selling an investment security for a higher price than originally paid, has a capital gain. A capital loss is realized when the fund sells an investment security for a lower price than originally paid. If the investment security is held by the fund for more than one year, the gain or loss will be a “long-term” capital gain or loss. Mutual funds that hold a investment security for less than one years is a “short-term” capital gain or loss. Mutual fund gains and losses are netted together and when the fund has a net gain, that gain is usually distributed to the share holder once a year. By law, mutual funds must pay out income and realized capital gains to share-holders. These distributions are taken from the fund’s assets which is why the net asset value is reduced by the same amount as the distribution. A secret in finding a top mutual fund is the performance success in the long-term (3 years or 5 years or 10 years). Obviously, if a fund has an long-term average of 10%, wouldn't the mutual fund be considered both prosperous and successful?
Benefits of receiving and reinvesting distribution for an IRA account:
- Dollar cost averaging.
- Tax avoidance.
- Shares increase.
There are basically two kinds of mutual fund distributions. Income and Capital Gains. The income distributed is quarterly (March, June, September & December). The shareholder receiving a mutual fund distribution has the option to either reinvest the income or receive payment in full amount.
A fund selling an investment security for a higher price than originally paid, has a capital gain. A capital loss is realized when the fund sells an investment security for a lower price than originally paid. If the investment security is held by the fund for more than one year, the gain or loss will be a “long-term” capital gain or loss. Mutual funds that hold a investment security for less than one years is a “short-term” capital gain or loss.
3. Return on Investment: The return of a mutual fund includes all income, capital gain distributions, and the performance for year-to-date. Therefore the return on investment is analyzed for one year, three years, five years and 10 years.
best interest rate for a 1-year CD is 1.05% minimum $25,000 deposit. If you are not satisfied with the performance of a 401(k) account from a previous employer, rollover the account into self-directed Individual Retirement Accounts.
About/Policy / Retirement Blog / Resources
Mutual Interest Data Service, Ltd.
P.O. Box 55365
Trenton, New Jersey 08638