vania-janet/multiturn-rag-retrieval-data huggingface dataset:
This decision depends upon a few things. I will list a couple:- 1.) What is your perception about financial markets in your time span of investments? 2.) What kind of returns are you expecting? 3.) How much liquidity do you have to take care of your daily/monthly expenses? 1.)If your perception about financial markets is weak for the near future, do not invest all your money in a mutual fund at 1 time. Because, if the market falls drastically, chances are that your fund will also lose a lot of money and the NAV will go down. On the other hand, if you think it is strong, go ahead and invest all at one time. 2.) If you are expecting very high returns in a short time frame, then SIP might not be a very good option as you are only investing a portion of your money. So, if the market goes higher, then you will make money only on what you have invested till date and also buy into the fund in the upcoming month at a higher rate( So you will get less units). 3.) If you put all your money into a mutual fund, will you have enough money to take care of your daily needs and emergencies? The worst thing about an investment is putting in all what you have and then being forced to sell in a bear market at a lower rate because you really require the money. Other option is taking a personal loan(15-16%) and taking care of your daily needs, but that would not make sense either as the average return that you can expect from a mutual fund in India is 12-13%. To summarize:- 1.) If you have money to spare and think the market is going to go higher, a mutual fund is a better option. 2.) If you have the money to spare and think that the market is going to fall, DON'T DO ANYTHING!.(It is always better to be even than lose). 3.)
In my opinion, the ability to set a sell or buy price is the least of my concerns.  Your question of whether to choose individual stocks vs funds prompts a different issue for me to bring to light. Choosing stocks that beat the market is not simple. In fact, a case can be made for the fact that the average fund lags the market by more and more over time. In the end, conceding that fact and going with the lowest cost funds or ETFs will beat 90% of investors over time.
Depends on the fund. If it's a Target Date fund, which is inherently diversified, this comes down to how much you trust the investment house to not go belly-up. If it's another kind of fund, you need to manage your own duversification and occasional rebalancing.  Most of my money is in index funds (details elsewhere), but that's five or six very different indexes to cover the investment space with the mix of investment types I've selected. And most of it is in a single family of funds, which might be argued to be higher risk than desirable but which has been convenient.
For what it's worth -- and I realize this isn't directly an answer to the question -- one of the advantages of sticking with mutual funds, beyond their being inherently diversified, is that it removes a lot of the temptation to try to time the market. When you need money, you sell shares in such a way that it maintains your preferred investment ratio, and simply don't worry about which stocks are  actually involved. (I've gotten 15% APR this year across all my investments, for absolutely minimal effort. That's quite good enough for me.)
Personally, I invest in mutual funds.  Quite a bit in index funds, some in capital growth & international.
"YES.. Management fees cut directly into your profits. A fund which achieves 8% growth but costs 1% to maintain delivers only 7% to you. Compounded over years, even a relatively small difference can add up to a significant amount of money. This is one of the advantages index funds have. They may not be as ""sophisticated"" as human-managed funds, but their expense ratio is so much lower that the end result for the investor is often as good as or better than the more expensive products. In fact, at least one study found that, for each category they researched, low expense ratio was a better predictor of good return on investment than anything else they looked at. That doesn't mean cheapest is always best or most expensive is always worst .... but it does mean you should be very, very sure an expensive fund really is that much better before choosing it. And sticking with simple index funds may be a perfectly reasonable choice."
If you have money and may need to access it at any time, you should put it in a savings account. It won't return much interest, but it will return some and it is easily accessible. If you have all your emergency savings that you need (at least six months of income), buy index-based mutual funds. These should invest in a broad range of securities including both stocks and bonds (three dollars in stocks for every dollar in bonds) so as to be robust in the face of market shifts. You should not buy individual stocks unless you have enough money to buy a lot of them in different industries. Thirty different stocks is a minimum for a diversified portfolio, and you really should be looking at more like a hundred. There's also considerable research effort required to verify that the stocks are good buys. For most people, this is too much work. For most people, broad-based index funds are better purchases. You don't have as much upside, but you also are much less likely to find yourself holding worthless paper. If you do buy stocks, look for ones where you know something about them. For example, if you've been to a restaurant chain with a recent IPO that really wowed you with their food and service, consider investing. But do your research, so that you don't get caught buying after everyone else has already overbid the price. The time to buy is right before everyone else notices how great they are, not after. Some people benefit from joining investment clubs with others with similar incomes and goals. That way you can share some of the research duties. Also, you can get other opinions before buying, which can restrain risky impulse buys. Just to reiterate, I would recommend sticking to mutual funds and saving accounts for most investors. Only make the move into individual stocks if you're willing to be serious about it. There's considerable work involved. And don't forget diversification. You want to have stocks that benefit regardless of what the overall economy does. Some stocks should benefit from lower oil prices while others benefit from higher prices. You want to have both types so as not to be caught flat-footed when prices move. There are much more experienced people trying to guess market directions.
Mutual funds are a collection of other assets, such as stocks, bonds and property. Unless the fund is a type that is traded on an exchange, you will only be able to buy into the fund by applying for units with the fund manager and sell out by contacting the fund manager. These type of non-traded funds are usually updated at the end of the day once the closing prices of all the assets in it are known.
The ETF is likely better in this case. The ETF will generally generate less capital gains taxes along the way.  In order to pay off investors who leave a mutual fund, the manager will have to sell the fund's assets.  This creates a capital gain, which must be distributed to shareholders at the end of the year.  The mutual fund holder is essentially taxed on this turnover.  The ETF does not have to sell any stock when an investor sells his shares because the investor sells the shares himself on the open market.  This will result in a capital gain for the specific person exiting his position, but it does not create a taxable event for anyone else holding the ETF shares.
This might be better suited to r/personalfinance but if you're looking to invest I'd say start with an index fund. The MER's (fees) for most other mutual funds take too heavy a chunk of returns to be worth it in a market where actively managed funds are either underperforming of performing at par with passive funds.   Additionally if these are your first investments, make sure you're doing it with investment goals in mind. Is this money you're saving for short, medium, or long term? For medium and long term investing make sure you're doing it through a tax efficient instrument like an IRA or 401k.
There's a sizable community of people and fiscal advisers who advocate not managing the money at all. Set your passive investor friend with automatic bank draft into a simple three/four fund portfolio of low cost index funds and never never ever trade.  See https://www.bogleheads.org/RecommendedReading.php You might be able to beat the stock market for a few years, but probably not over the long term.  Most mutual fund professionals don't.  Playing with your own money is one thing: playing with other people's money is a whole other ball game.
It would seem that you are in a position where you are able to save money and you hope to have your money work for you. From your statement above, it is implied that you are a professional with a steady income not related to the finance field. With that said, it is better to diversify your portfolio and have your money work for you through passive investments rather than an active one, where you actively search for companies that are below market price. That research takes time and much more experience in order to properly execute.  Now, if your overall goal is to trade actively, then maybe researching individual companies might be the best way to get your feet wet. But, if your goal is to create a diversified portfolio and make your money work for you, then passive is the way to go.  Two passive financial Vehicles:  Mutual funds and ETFs. Depending on what you are hoping to accomplish in the future, an ETF or a mutual fund will likely suite your situation. I would encourage you to do your due diligence and find out the weakness and strength of each. From there you are able to make an informed decision.
I choose lifecycle funds because I am placing faith (perhaps foolishly) that a full time fund manager knows better what to pick than I.  The same reason I go with mutual funds in general apply to to why I also have the lifecycle funds.  Presently my diversification strategy is really just index funds and lifecycle funds. The radio advice guy Clark Howard often promotes them. http://www.wacotrib.com/none/content/shared/money/stories/clark/0601/060425money.html (I count in the intimidated group)
Diversified is relative. Alfred has all his money in Apple.  He's done very well over the last 10 years, but I think most investors would say that he's taking an incredible risk by putting everything on one stock. Betty has stock in Apple, Microsoft, and Google.  Compared to Alfred, she is diversified. Charlie looks at Betty and realizes that she is only investing in one particular industry.  All the companies in an individual industry can have a downturn together, so he invests everything in an S&P 500 index fund. David looks at Charlie and notes that he's got everything in large, high-capitalization companies.  Small-cap stocks are often where the growth happens, so he invests in a total stock market fund. Evelyn realizes that David has all his money tied up in one country, the United States.  What about the rest of the world?  She invests in a global fund. Frank really likes Evelyn's broad approach to equities, but he knows that some portion of fixed-income assets (e.g. cash deposits, bonds) can reduce portfolio volatility—and may even enhance returns through periodic rebalancing. He does what Evelyn does, but also allocates some percentage of his portfolio to fixed income, and intends to maintain his target allocations. Being diversified enough depends on your individual goals and investing philosophy.  There are some who would say that it is wrong to put all of your money in one fund, no matter what it is.  Others would say that a sufficiently broad index fund is inherently diversified as-is.
i.e. it's important to think of your portfolio as a whole, not look at the loss in the stocks portion. An all-in-one fund keeps you from seeing the stocks-by-themselves loss number, which is a good way to trick yourself into behaving sensibly. If you want to rebalance ""more aggressively"" then look at value averaging (search for ""value averaging"" on this site for example). A questionable approach is flat-out market-timing, where you try to get out and back in at the right times; a variation on this would be to buy put options at certain times; the problem is that it's just too hard. I think it makes more sense to buy an allocation fund that does this for you. If you do market time, you want to go in and out gradually, and value averaging is one way to do that."
If you're worried about volatility, and you're in mostly long positions, you should be looking to diversify your portfolio (meaning, buying some stocks that will do better in a bear market) if it's not already diverse, but you shouldn't be looking to abandon your positions, unless you anticipate a short-term need for cash.  Other than that, you may want to hold off on the short-term positions for a while if you're concerned about volatility, though many traders see volatility as a great time to make money (as there is more movement, there's more opportunity to make money from mispriced stocks in both directions).  Unless you think the market will be permanently down due to these reasons, anyway, but I don't see any reason to believe that yet.  Even World War Two wasn't enough to permanently hurt the market, after all! Remember that everyone in the market knows what you do.  If there were a sure thing that the market was going to crash, it already would have. Conservative positions tend to involve holding onto a well diversified portfolio rather than simply holding onto cash, unless the investor is very conservative (in which case the portfolio should be cash anyway). The fact that you say this is your rainy day fund does make me a little curious, though; typically rainy day funds are better in cash (and not invested) since you might hit that rainy day and need cash quickly (in which case you could take significant losses if the time isn't right).
Vanguard might be the top provider of no-load mutual funds around.  Attempting to do better than 0.13% in fees is just as likely to cost you more time than the money you're attempting to say.  You're in your first job out of school--you've got better things to do with your time.
I think you need a diversified portfolio, and index funds can be a part of that. Make sure that you understand the composition of your funds and that they are in fact invested in different investments.
Remember, the reason you buy funds is to get instant diversification, not because you are willing to gamble that your mutual funds will outperform the market. Head to the bogleheads forum for more specific advice about 3 fund portfolios and similar suggested investment strategies like the lazy portfolios. The folks in the forums there like to give specific advice that's not appropriate here. If you use a non-tax-advantaged account for investing, buy and sell in a tax-smart way. At the end of the year, sell your poor performing stocks or funds and use the loss as a tax write-off. Then rebalance back to a good portfolio. Or if your tax bracket is very low, sell the winners and lock in the gains at low tax rates. Try to hold things more than a year so you are taxed at the long-term capital gains rate, rather than the short-term. Only when you have several million dollars, then look at making individual investments, rather than funds. In a non-tax-advantaged account owning the assets directly will help you write off losses against your taxes. But either way, it takes several million dollars to make the transactions costs of maintaining a portfolio lower than the fees a cheap mutual/index fund will charge.
"If you want a Do-It-Yourself solution, look to a Vanguard account with their total market index funds.   There's a lot of research that's been done recently in the financial independence community.  Basically, there's not many money managers who can outperform the market index (either S&P 500 or a total market index).  Actually, no mutual funds have been identified that outperform the market, after fees, consistently.  So there's not much sense in paying someone to earn you less than a low fee index fund could do.  And some of the numbers show that you can actually lose value on your 401k due to high fees. That's where Vanguard comes in.  They offer some of the lowest fees (if not the lowest) and a selection of index funds that will let you balance your portfolio the way you want.  Whether you want to go 100% total stock market index fund or a balance between total stock market index fund and total bond index fund, or a ""lazy 3 fund portfolio"", Vanguard gives you the tools to do it yourself.  Rebalancing would require about an hour every quarter. (Or time span you declare yourself). jlcollinsnh A Simple Path to Wealth is my favorite blog about financial independence.  Also, Warren Buffet recommended that the trustees for his wife's inheritance when he passes invest her trust in one investment.  Vanguard's S&P500 index fund.  The same fund he chose in a 10 year $1M bet vs. hedge fund managers.  (proceeds go to charity).  That was about 9 years ago.  So far, Buffet's S&P500 is beating the hedge funds.  Investopedia Article"
Mutual funds typically are comprised of many stocks, and you earn based on their collective performance. You have done very well, and I'm very excited for you. Child's College Savings: If you guys decide to expand your family with a child, you'll want to fund what's typically called a 529 plan to fund his or her college education. The money grows tax free and is only taxed when used for non-education expenses. You would fund this for the max contribution each year as well (currently $2k; but that could change depending on how the Bush Tax cuts are handled at the end of this year). Other resources to check out: The Total Money Makeover by Dave Ramsey and the Dave Ramsey Show podcast.
"If I invest in index funds or other long term stocks that pay dividend which I reinvest, they don't need to be worth more per share for me to make a profit, right? That is, if I sell part of the stocks, it's GOOD if they're worth more than I bought them at, but the real money comes from the QUANTITY of stocks that you get by reinvesting your dividends, right? I would say it is more the other way around. It is nice to get dividends and reinvest them, but overall the main gain comes from the stocks going up in value. The idea with index funds, however, is that you don't rely on any particular stock going up in value; instead you just rely on the aggregate of all the funds in the index going up. By buying lots of stocks bundled in an index fund, you avoid being too reliant on any one company's performance. Can I invest ""small amounts"" (part of paycheck) into index funds on a monthly basis, like €500, without taking major ""transaction fees""? (Likely to be index fund specific... general answers or specific answers using popular stocks welcomed). Yes, you can. At least in the US, whether you can do this automatically from your paycheck depends on whether you employer has that set up. I don't know that work in the Netherlands. However, at the least, you can almost certainly set up an auto-invest program that takes $X out of your bank account every month and buys shares of some index fund(s). Is this plan market-crash proof? My parents keep saying that ""Look at 2008 and think about what such a thing would do to your plan"", and I just see that it will be a setback, but ultimately irrelevant, unless it happens when I need the money. And even then I'm wondering whether I'll really need ALL of my money in one go. Doesn't the index fund go back up eventually? Does a crash even matter if you plan on holding stocks for 10 or more years? Crashes always matter, because as you say, there's always the possibility that the crash will occur at a time you need the money.
For the other investment assets/vehicles, you should review a few things: Personally, I prefer to keep my portfolio simple and just pick just a few options based on my own risk tolerance. From your fund examples, without knowing specifics about your financial situation and risk tolerance, I would have created a portfolio that looks like this when I was in my 20's: I avoided the bond and income/money market funds because the growth potential is too low for my investing horizon. Like some of the other answers have noted, the Target Date funds invest in other funds and add some additional fee overhead, which I'm trying to avoid by investing primarily in index funds. Again, your risk tolerance and personal preference might result in a completely different portfolio mix."
"If your intention is to purchase ETFs on a regular basis (like $x per month), then ETFs may not make sense.  You may have to pay a fixed transaction cost like you were buying a stock for each purchase.  In a similar no load mutual fund, there are more likely to be no transaction costs (depending on how it is bought).   The above paragraph is not very definitive, and is really dependent upon how you would purchase either ETFs or Mutual funds.  For example if you have a Fidelity brokerage account, they may let you buy certain ETFs commission free.  Okay then either ETFs make great sense.  It would not make sense to buy ones that they charge $35 per transaction if you have regular transactions that are smallish. The last two questions seem to be asking if you should buy MF or buy stocks directly.  For most people the later is a losing proposition.  They do not have the time or ability to buy stocks directly, effectively.  Even if they did they may not have the capital to make enough of a difference when one considers all the cost involved.  However, if that kind of thing interests you, perhaps you should dabble.  Start out small and look at the higher costs of doing so as part of the ""cost of doing business""."
Go with a Vanguard ETF.  I had a lengthy discussion with a successful broker who runs a firm in Chicago. He boiled all of finance down to Vanguard ETF and start saving with a roth IRA. 20 years of psychology research shows that there's a .01 correlation (that's 1/100 of 1%) of stock/mutual fund performance to prediction. That's effectively zero. You can read more about it in the book Thinking Fast and Slow. Investors have ignored this research for years. The truth is you'd be just as successful if you picked your mutual funds out of a hat. But I'll recommend you go with a broker's advice.
I think most of us need to have the fun part separate from the serious cash part. Maybe literally distinct accounts that you keep at separate brokerages. Or just do something else for fun, besides investing. Morningstar has this problem too, and finance.yahoo.com, and Bloomberg, I mean, they are all interested in making you think about investing a lot more than you ought to. They all have an incentive to convince you that the latest headlines make a difference, when they don't. Bottom line, I don't think personal finance changes very quickly; the details of specific mutual funds change, and there's always some new twist in the tax code, but the big picture is pretty stable. I think going in-depth (say, read the Chartered Financial Analyst curriculum materials) would teach you a lot more than reading blogs frequently. The most important things to work on are income (career) and spending (to maximize income minus spending). That's where time investment will pay off. I know it's annoying to argue the premise of the question rather than answering, but I did try to mention a couple things to read somewhere in there ;-)"