Mutual Interest Data Service, Ltd.
Retirement Growth & Dividends
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A validated method of investment growth is investing and reinvesting in IRA mutual funds having gains in good times and minimal losses in bad times. IRAs (Individual Retirement Accounts) are saving accounts to help individuals save money for retirement. IRAs provide tax breaks that will help you to build and enlarge retirement savings at an accelerated pace. IRAs are investments that you manage and control. Mutual funds are security investments of companies that collect funds from the investor and pool the assets for the purpose of building a portfolio of securities according to established objectives. The mutual fund portfolio categories (objectives) include large-cap, small-cap, mid-cap, equity income, specialty, real estate, technology, balanced, bonds, etc. Top mutual funds vary month-to-month, year-to-year. The valuable ingredients that makeup a successful mutual fund consist of performance, fund category rank, income distribution, 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.
Year-To-Date Performance: A comparison of the current market closing share price vs. the opening share price as of the first market day of the year. The analysis reveals percent of gain or loss of mutual fund's net asset.
EXAMPLE: As of January 3, 2015, the closing net asset value (share price) of a mutual fund was $20.00 per share. On February 2, 2015; the closing nav is $20.50. The opening market of February 3, 2015 would show a 2.50% "gain" for year-to-date.
Every mutual fund is assigned to a specific fund category. If, for example, a mutual fund's objective designation is Flexible Portfolio, the fund investment category would be Flexible Portfolio. Presently. There are 577 funds in this category. If a mutual fund's rank (return comparison) is 10%, that means the fund's category rank is in the top 58 mutual funds serving the category.
2. Dividend 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 shareholders.
The distributions are taken from the mutual fund’s assets which results in a net asset value reduction of the same amount as the distribution. A secret in finding a top mutual fund is the performance success in the long-term (3 years, 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 Individual Retirement Account inclue dollar-cost-averaging, tax avoidance and increase of mutual fund shares.
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. 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 Account that you control and maintain.
Mutual Interest Data Service, Ltd.
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Trenton, N.J. 08638