My answer to these people is simple... If you have been losing money with your retirement, if you are in the least bit worried about your cd in a certain bank that is failing or failed, or been bought out,  then TAKE IT OUT!! Okay, then the next question is I will be penalized right? Of course you will, its the us government... So How can i help them get their losses back you are wandering?  I rollover or transfer their money from their retirement to one of my annuity products from an A plus rated company by standard and poors, and the street.com.  Example of one case i just rolled over.. This guy calls me up and says, i have lost 30 grand since the beginning of 2008.  I meet with him, look over his Mutual Fund account.. All i could do is shake my head.. its true he did lose 30 grand since january of 2008. 

So in the month of may 2008, i transferred his money to a Vista index accelerator annuity.. As soon as his money went into the account i put him in(annuity) which was 500 thousand dollars, he was immediately bonused 8%, which comes out to 40 grand.. How much did he lose with the mutual fund? answer- 30 grand.. So already he has made a 10 thousand dollar profit on his money. I am watching his account, by the end of 2008, he will make 60 thousand dollars. That is a total of 560 thousand dollars.. When im dead and gone, and he is dead and gone,  his children will still be millionaires.  With Annuities, you cannot lose any money, it is no connected to the stock market whatsoever! 

He is invested into a private company with an A plus rating by standard and poors, and thestreet.com  My company has over 330 billion dollars in its general account(insurance company).  People open your eyes, and your retirement statements.  The government might have bailed out wall street, but when will it happen again.  Annuities are the best thing that ever happened to working men and women!!!

It is similar to buying stock in that you are actually buying mutual fund "shares" that makes one a shareholder in that fund.  But, unlike stocks, which in buying shares of stock signify direct ownership in a company, mutual fund shares represent ownership of a fund which in turn is invested in different companies. Example, if a particular mutual fund has purchased stock in Disney, Coca-Cola, Microsoft and other companies, a shareholder in that fund is essentially an indirect stockholder in all of those companies, but without the rights usually afforded to corporate shareholders.

Here's some advantages mutual funds have over other kinds of investments (Pollack and Heighberger : The Real Life Investing Guide, 1998) :

Diversification

Diversified investment allows new investors, even those with just a few dollars, to spend their money over a wide range of stocks and bonds. Diversification means that the investor's money is divided between many different types of stocks and bonds, allowing investors to cushion losses from a single investment.

Professional Management

Allows the inexperienced investors to hire the expertise of a fund manager whose full time job is to eat, drink, and sleep mutual funds.

Cost - Controls

Mutual funds can be started without charges. Unlike stocks, which require brokers and their commission charges to get started.

Its not all that difficult to understand the day to day happenings of the stock market. Once you start involving yourself in the market you will tend to forget everything and when I say everything it literally means everything except the stock market. Anyone can make a lot of money from the market provided he follows the principle of total control over himself, one must never get temp no matter how good the opportunity is, the most important thing is never to day trade in the market, which basically means buying shares and selling the same shares on the same day.

The most important principle which should be followed is trading on an investment basis, which means you build a portfolio which includes all your top shares, give your investment some time to come up. See the right opportunity of buying shares for a long term plan. When there is a slaughter in the market and you firmly believe that the sensex (as it is known in India) or the Nasdaq will not take any further correction that is the correct point to buy your shares for a long term.

Never be hasty and never run out of patience, always be hopeful that your shares will do good over a period of time. Never think of making money on a day to day basis, thats the biggest mistake which people make. Invest only a limited amount of your total capital never take a very big risk in the market, simply because it's impossible to predict what is going to happen in the market.

This is from personal experience and I firmly believe that experience is the best teacher. There are a lot of things which effect the market, like how good the countries' economy is doing? How much is the inflation rate in the country? Always keep in mind all the important things and then pick your scripts and show a lot of patience and content.

Opinions about whether the U.S. is in recession are all over the board. Why is there no clear answer?

What should you do with your investments?

Financial trade publications disagree. "Buy global funds! Buy foreign funds! (Is there a difference?) Buy U.S. funds! Buy Euros! Buy commodities!" Ugh.

What is a Recession?

A recession is defined by most people as "two consecutive quarters of negative Gross Domestic Product growth." In English, that means that the U.S. economy is shrinking, not growing, for at least six consecutive months. The last quarter for which data are available says that the economy grew .6% in the fourth quarter (ended December) 2007. So, if there is a recession, the earliest it could have started in January, 2008. We'll get preliminary figures for the first quarter 2008 in about a month. Preliminary figures can, and do, change.

Are We in Recession?

According to the Philadelphia branch of the Federal Reserve Bank, growth in the first quarter of 2008 was projected at .7%, with the probability of a downturn at 47%. Growth in the second quarter of 2008 is projected at 2.3%, with the probability of a downturn at 43%. So, very small growth is projected, with a probability of less than 50% of an actual contraction.

Any way you look at it, growth is projected to be less than normal at best, and recessionary at worse, in the first half of 2008. Nobody - not the Fed, not the President, not Congress, not Warren Buffett - nobody will know for sure whether there has been a recession until second quarter 2008 preliminary figures are promulgated next July.
And by then, it may be over.

How Do Markets Work During Recessions?

 

The stock market is a discounting mechanism. That means that it looks about six months into the future and prices accordingly. That said, if growth (at 2.8% according to the Philly Fed) is predicted for the second half of the year, the correction should be about over, and it may be time to start taking a look at investing some of your portfolio now.

Are You a Stock Market Investor?

 You may be a candidate for stock market investing IF

• Your investment goal is at least five years away; and
• Your tolerance for risk is appropriate (you can absorb a 20% correction, or decrease in value, without selling); and
• You have adopted a selling strategy (you know why you're buying and the conditions that would cause you to sell).

Currently, an investment in the Standard & Poor's (S&P) 500 will cost you about 13.60 times projected earnings. That means, for every dollar of projected earnings over the next year, you'll pay about $13.60.

 

Is that a good price?

Well, according to S&P, the "benchmark " price for this index is 15.74. At 13.60, the price you'd pay now is about 14% less than its long term average price of 15.74.

What to Buy?

Lots of pundits are suggesting putting money in "Emerging Markets," which include behemoths India and China - places where growth is in double digits and climbing. The price of these markets, however, is sky high, and the price you pay is in dollars, which has generally fallen in purchasing power compared with other currencies. And, most importantly, would you know when it's time to sell?

The safest bet, according to many, is the U.S. market. Some pundits further suggest investing in U.S. companies that earn a significant portion of their earnings overseas. Those are called global stocks. (Foreign stocks are those companies headquartered outside the U.S.)

By and large, the safest way to invest in the U.S. is to buy an index, or group of stocks. There are many indices - the Dow Jones Industrials, the S&P 500, the Russell 2000, the Wilshire 5000 - 30, 500, 2000, and 5000 companies, respectively. As a general rule, the more diversified you are, the less volatile your investment, as compared to the market as a whole. The index of choice for many investors looking for companies with significant overseas sales is the S&P 500.

Some investment theorists believe that, over the long term, very, very, few investors beat the returns of the market as a whole, so it's best to invest in an index fund. Index funds have the additional benefit of having low management fees, which leaves more of the return in your portfolio.

 

When to Buy?

Because no one knows if there is a recession, or when it will end (if there is one), exactly when the market has discounted the bottom of the cycle is tricky. Assuming we rely on the Philly Fed's number, the third and fourth quarter are projected to grow at 2.8%. If you agree that the market discounts about six months in the future, it's time to start looking now.

Some leading technical analysts (those who use past market behavior, not fundamental analysis, to predict the future) think that the S&P 500 will "retest its low (1256.98 - a 20% drop from its high of 1576.09)," but nobody knows for sure. It's currently at 1332.83 - 5.7% above its 52 week low.

Instead of trying to predict a "bottom," many smart investors "dollar cost average," or put money into the market every paycheck, month or quarter. This may be a good time to start doing that.

Of all the economic indicators I follow (and I follow twenty-one), the one I feel is most predictive of when the market is a ‘buy,' is "Sentiment. " Sentiment measures the consensus of "bullish" (market up) and "bearish" (market down) opinion. It is, however, a negative corollary, i.e., the more bearish the opinion, the better the indicator, or when most people are negative, that's a positive (and vice versa).
Bullish sentiment is as low as it's been since I've followed this indicator in 1995. That's good.

 

How Much to Buy?

There are lots of formulas for how to diversify your portfolio, but one of the simplest, and most reliable, is to subtract your age from 100. Put that percentage of your long term (over five years) investment in stocks, and the rest in money market funds, short term bonds or certificates of deposit.

 

How to Buy?

If you decide, for example, to put the stock portion of your investments into an index fund, Vanguard (www.Vanguard.com) provides a low cost way to do so. And averaging your investments over the next six months may be the safest way to go.
To get started with the bond investments, Barron's (www.Barrons.com) gives Top Savings Deposit Yields in its Market Laboratory pullout section, on the page titled "Market Laboratory - Bonds." Again, averaging in over time in relatively short term (2 ½ Year CDs) may be best, as the Fed is likely to begin raising interest rates, as recessionary fears subside.

 

When to Sell?

As we've discussed, no one belongs in the stock market unless his or her investment timeline is more than five years, he or she can tolerate periodic 20% market corrections without selling, and there is a selling strategy. When would you sell the U.S. market?

Few credible financial sources predict a recession lasting longer than two quarters. As long as the long term prospects of the U.S. economy are positive, this is a relatively safe investment.

Yes, there is a serious housing market price correction, rising unemployment, high gas prices, high deficits and a falling dollar. But, unless and until you feel that fundamental prospects of the U.S. economy are negative in the long term, this market is a good long term investment.

Times are Tough

Remember the "Sentiment" indicator. Buying "low" often means buying at times when the mood of the market is very negative. Remember that the "tech bubble," the 1987 correction, and the runaway inflation in the 1970's were all very serious financial problems. And the U.S. economy withstood them.

This, too, shall pass.

What is a mutual fund? How does one invest in it? When you invest in a mutual fund, your money is combined with the money of many other investors. Professional fund managers use this pool of money to create a portfolio of investments, which may include:

• Stocks: ownership of shares in publicly held companies;
• Bonds: interest-bearing certificates issued by governments and corporations; and
• Money Market Securities: short-term instruments, such as Treasury bills and certificates of deposit, that mature in less than one year.

Each mutual fund has specific investment goals that can range from long-term growth to current income. In addition, a fund may be invested in specific types of investments to achieve its goals, such as dividend-paying stocks, international investments, or long-term bonds. Owning shares of a mutual fund is similar in some ways to owning shares of stock in an individual company. The mutual fund company will ask you to vote for its board of directors and to help determine other company matters. The mutual fund also may pay you dividends from the securities in which it invests, or capital gains that the fund made from selling securities.

According to mutual fund investors, the three most important benefits of mutual fund investing are:

1. Professional management - You can rely on the expertise of professional portfolio managers to select investments for the fund. This can be especially valuable during times of volatile prices and uncertain market direction.
2. Investment diversification - A mutual fund allows you to spread your money among many different securities. Whether you invest in one mutual fund or several, keep in mind that your investments should include a mix of stocks, bonds, and money market securities to lower your overall investment risk.
3. Convenience - It is easy to buy and sell mutual fund shares, exchange shares between funds, and reinvest your distributions of dividends and capital gains.

When selecting or evaluating a mutual fund, look at the fund's performance over the long term. Consider periods such as one year, five years, and ten years. Keep in mind that past performance is no guarantee of future results. And there are important factors to consider in addition to a fund's performance. For example:

• Your risk tolerance and investment time horizon;
• The fund's objectives and investment style;
• The tenure of the fund's manager(s);
• The stability of the fund company;
• The fund's compatibility with your investment goals; and
• The fees associated with investing in the fund.

Analyzing these factors and long-term performance can provide you with a complete picture. Be sure to read the prospectus carefully before investing or sending money. A mutual fund's prospectus includes details of its objectives, investments, fees, and other pertinent information.

Mutual funds are pools of money that are used to buy stocks in companies. The manager of the mutual fund takes the money and buys stocks in companies that he/she believes will be profitable, and companies that are in line with the theme or strategy of that fund. In exchange for this management, he charges an MER (management expense ratio) which is usually between 1 and 3 percent. This is taken off of the performance of the fund, so if a fund says it made 10% in a year, it really made 12% minus the 2% MER. If the companies that the manager invests in increase in value, the fund increases in value and you make money. If the companies lose value, you lose money. The amount of gains and loses are lowered because the money is spread out into a number of different companies. To explain this further, think if you had all of your money in one wallet, if you lost that wallet, you wouldn't have any money left, but if you had 2 wallets, if you lost one, you would still have half of your money left.

Some funds have themes that may vary based on the risk involved in the investment strategy. The higher the risk, the greater the potential to gain or lose money. The risk decreases over time, so if you have a long time to invest, you can take more chances. This concept is explainable by looking at the stock market indexes. They may increase or decrease in any given year, but over the long term (20+ years)have increased on average by around 10%, even including the stock market crashes.

Investing in the stock market is very complex, and most people do not have enough money to create a proper stock portfolio that is well diversified and protected against loss. Mutual funds allow normal people to be able to invest in a diverse portfolio that is managed and picked by professionals who know how to properly invest.

The specific banks that own a mutual fund will often let you trade the funds for free if you buy their fund through their institution. If you buy mutual funds through a broker, they will charge you trailer fees, or brokerage fees. This is in addition to the MER (Management expense fees) that are already being charged to the fund.

With mutual funds, it is important to note that past performance does not dictate future performance. Many people think that if a fund has always increased in value year after year, that it will always continue to do so. This simply is not true. Funds can vary significantly over time, and if everything is working well, will hopefully increase in value as an average. One fund that I have seen lost 5% for 3 years in a row, and then gained 200% one year, then went back to losing money again. If you invested in this fund for three years and then quit, you would lose money. If you invested in it for longer than that, you would gain money as an average. The mistake that people make is to try to get figure out when the fund will make that big gain, rather than invest for the long term.

Remember that the gains that you earn in mutual funds is not always certain. As you get closer to retirement, you may want to move funds to lower risk investments like money market funds or even to guaranteed investments like GIC's. The last thing you want is to work hard all of your life, then, right before retirement, your mutual funds lose a bunch of money, which could prevent you from retiring at that time. Remember: the shorter time you have to invest, the less risk you should take.

Do these questions sound familiar to you? Investing can be very scary and frustrating due to the new concepts and because you are turning you nest egg over to someone you may not even know well or at all. The key to having a successful investment plan is to become familiar with all types of investments and strategies in which to use them

One of the most popular investment vehicles used today is the mutual fund. Mutual funds offer investors a way to prepare for the future in a simple, accessible and affordable manner. According to the Investment Company Institute, the number of mutual funds that are available to investors more than triples the number of individual stocks on the New York Stock Exchange.

When you put your money into a mutual fund, it is pooled with money from other investors who have similar invest goals. A professional money manager then invests the money into a variety of securities that will help the fund achieve its stated goals. A mutual fund can be made up of any number stocks, bonds, or a combination of the two.

Diversification is central to having a balanced investment portfolio. No single investment performs well under all market and economic conditions. Owning a variety of securities smooth's out the ups and downs that are sure to happen in the market. Diversification also helps to lower the risk in your portfolio by offsetting losses from some investments with gains in others. Mutual fund managers choose investments from different security types, countries, industries and/or market cap.

Mutual funds are run by professional money managers. That is one of the key advantages to owning mutual funds. The securities in the mutual funds are selected and monitored by professional money managers. These professionals have extensive experience in the securities markets and are constantly researching the dynamic conditions of individual industries and the overall economic environment.

Professional money managers strive to ensure that the securities within the mutual funds accomplish the stated objectives of the funds. Managers may change the portfolio mix based on the results of their research.

Mutual funds are loaded with convenient features as well. They are very liquid investments, which means you can sell all or some of the shares on any day the market is open. The minimum required investment is relatively low compared to other investment vehicles. In some cases, you can invest as little as $25 a month. With the ability to invest a set amount of money on a regular basis allows you to dollar cost average.

Dollar cost averaging is a technique designed to reduce market risk through the systematic purchase of securities at predetermined intervals and set amounts. The variety of mutual funds that are available allows you to invest for almost any need or circumstance.

Is that thing loaded?

A sales commission, also known as a load, is the charge investors may pay when purchasing shares of a mutual fund. Not all funds charge a sales commission. Mutual funds can be divided into three groups, front-end, back-end, and no-load funds.

When purchasing shares of a front-end load fund (also known as A-shares), you pay a one time charge that is deducted from the initial investment. The charges range from 3 percent to 8.5 percent of the initial investment. Sales charges are reduced for large purchases or as you accumulate larger balances.

Back-end load funds do not charge an upfront fee, but have higher expenses over a longer period of time. Furthermore, if you sell your shares within a specified period, a sales charge will be assessed. The amount of the deferred sales charge decreases over each year until it disappears. Theses funds are also called “B-Shares”.

Generally you would buy no-load shared directly from the issuer's sales force without any form of added sales charge. However, some have service fees. No-load funds usually do not have share classes.

Why on Earth would anyone buy a fund with a load?

Most load fund groups distribute their mutual funds through investment representatives. The investment representatives help the clients determine which funds would best fit their needs and risk tolerance. They also advise the clients when to buy, sell or change to another fund. Representatives receive a portion of the investment commission charged by the mutual fund group in return for their advice and services.

No-load groups distribute their funds directly to investors through toll-free numbers, leaving investors to make their investment decisions on their own. Even though the no-load funds do not charge a commission, they are not free of charge. The funds have to pay for all of the marketing campaigns used to promote the fund. These expenses are deducted from the fund each year as part of the funds operating expenses, which lowers the funds overall annual investment returns.

Mutual funds offer different commission structures. Investors can choose the one that best suits their needs. There are many important factors that must be considered when choosing a mutual fund. One of the most important is the annual return net of all fees. If you can narrow you chooses down to a few mutual funds that are very similar in risk and style, you should choose the fund that has the highest return net of all fees.

If the no-load fund out-performs the loaded funds choose it, however if you the loaded fund still has a higher return after all if the fees have been deducted it is your best choice assuming all thing equal otherwise.

There is something called risk pyramid, which shows that the more risk you are willing to take the more returns you may expect to target and vice versa. For example you are investing a major portion of your money in anticipation of greater returns. Also you are willing to lose that entire money in the face of a crisis. The reasons could be different. May be you could earn that money easily or may be you are so young that you need to bother. Whatever it is, that kind of investment is proper if you are willing to take risk.

On the other hand if you do not wish to lose all of your money but only a partial amount then you should invest most of your money in either balanced mutual funds or bonds. The rest, which you could afford to lose without any loss to your normal financial life, can be invested high risk equity funds or directly in stocks.

Stocks when invested in a particularly fast growing company could give a boost to your capital. But if you enter at wrong time or if you controlled greed and fear then it can land in ditch.

Knowing your risk vs. return attitude really helps you do proper asset allocation for investments to meet your financial goals.

After deciding a top level allocation like bonds, mutual funds and stocks, you should also decide to invest how much in certain type of bonds, balanced funds, equity funds, small cap stocks, mid cap stocks and large cap stocks. This division is important as it makes you disciplined and well planned in your investments. Often it is said that it is not important what your plan is but that you have a plan for your investments is very important.

Doing this, in the beginning of your journey of investing, will not make you regret later.