The Beginnings of Mutual Funds
You might be hearing a lot about mutual funds and are wondering why it is a popular investment opportunity. Investors prefer to invest in mutual funds over traditional forms of investments such as certificates of deposit and money market accounts because of one thing " the amount of return it brings to them. With a properly managed mutual fund, you can expect the biggest return of your investment.
For the novice investor, investing in mutual funds is recommended because you dont need to take crash courses and make crucial decisions that can affect the potential returns of your investment. Mutual funds allow you to get a feel of the industry before investing a big chunk of your money. It is also considered a low risk investment because it diversifies the funds asset over various investment options.
To fully understand the concept of mutual funds, it is important that we take a look at its history. Some historians believe that it was a Dutch merchant named Adriaan van Ketwitch who conceived the idea of mutual funds. But others believed that that the mutual fund concept started in the Netherlands when King William I launched his closed-end investment companies.
Nevertheless, the idea was so great that France and Great Britain acknowledged it. Soon enough, the United States followed suit. But the mutual funds of the past are very much different from what it is today. It was only during 1907, with the creation of the Alexander Fund, that the modern mutual fund began to take shape. Since then, additional changes have been included in the general concept including withdrawals on demand and semi-annual issues.
The creation of the Massachusetts Investors Trust in 1924 signified the start of the modern mutual fund. By the following year, the Trust grew to having an asset base of $400,000.00 with 200 shareholders. In 1928, the fund went public. In the same year, a mutual fund called the Wellington Fund was the first one to include stocks and bonds in their investment options. This prompted an increase in the value of stocks which made investors to invest in the market heavily. With these events, 1928 was considered one of the most wonderful years in mutual fund history.
Then the unexpected happened, the worst stock market crash hit Wall Street in 1929. The value of stocks declined immediately and there was little demand for goods which lead to the Great Depression. But something positive came out of this crash, finally, the government took notice of the mutual fund industry. They then passed laws which govern the industry to protect its investors from deceit.
With all the governing laws in place, the stock market regained the trust of the investors. This indicated the start of the flourishing of the mutual fund industry. By the end of the 60s, about 270 funds were around with assets amounting to $48 billion. From then on, the mutual fund industry continued to grow.
Today, the mutual fund industry has gained recognition from the different countries all over the world as more people realize its benefits. And with so much to gain, the mutual fund industry will continue to become a popular investment vehicle for investors in the years to come. - 23223
For the novice investor, investing in mutual funds is recommended because you dont need to take crash courses and make crucial decisions that can affect the potential returns of your investment. Mutual funds allow you to get a feel of the industry before investing a big chunk of your money. It is also considered a low risk investment because it diversifies the funds asset over various investment options.
To fully understand the concept of mutual funds, it is important that we take a look at its history. Some historians believe that it was a Dutch merchant named Adriaan van Ketwitch who conceived the idea of mutual funds. But others believed that that the mutual fund concept started in the Netherlands when King William I launched his closed-end investment companies.
Nevertheless, the idea was so great that France and Great Britain acknowledged it. Soon enough, the United States followed suit. But the mutual funds of the past are very much different from what it is today. It was only during 1907, with the creation of the Alexander Fund, that the modern mutual fund began to take shape. Since then, additional changes have been included in the general concept including withdrawals on demand and semi-annual issues.
The creation of the Massachusetts Investors Trust in 1924 signified the start of the modern mutual fund. By the following year, the Trust grew to having an asset base of $400,000.00 with 200 shareholders. In 1928, the fund went public. In the same year, a mutual fund called the Wellington Fund was the first one to include stocks and bonds in their investment options. This prompted an increase in the value of stocks which made investors to invest in the market heavily. With these events, 1928 was considered one of the most wonderful years in mutual fund history.
Then the unexpected happened, the worst stock market crash hit Wall Street in 1929. The value of stocks declined immediately and there was little demand for goods which lead to the Great Depression. But something positive came out of this crash, finally, the government took notice of the mutual fund industry. They then passed laws which govern the industry to protect its investors from deceit.
With all the governing laws in place, the stock market regained the trust of the investors. This indicated the start of the flourishing of the mutual fund industry. By the end of the 60s, about 270 funds were around with assets amounting to $48 billion. From then on, the mutual fund industry continued to grow.
Today, the mutual fund industry has gained recognition from the different countries all over the world as more people realize its benefits. And with so much to gain, the mutual fund industry will continue to become a popular investment vehicle for investors in the years to come. - 23223
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The author's website provides information about mutual funds in the Philippines and explains the history of mutual funds.
posted by X - Men @ 5:00 AM
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