How often do you find yourself saying: "I wish I knew how to learn more about structured settlement mutual funds"
Well, this article about structured settlement mutual funds was written with you in mind. Enjoy.
Among the options open to you if you've received a structured settlement from a lawsuit or arbitration is what's known as structured settlement mutual funds. You should take some time before you choose an investment vehicle for your settlement money and learn the pros and cons of the mutual fund option.
Always keeping your long-term financial security in mind, structured settlement mutual funds offer advantages and disadvantages when compared to other investing options.
When you are awarded a structured settlement, an insurance company sets up an annuity in order to pay you small portions of the money at regular intervals. The safest option is to keep the money"in house" and get a guaranteed scheduled payment that will never change. The downside to going this super-safe route is that your money will not grow (much, if at all).
With structured settlement mutual funds, however, the money is invested in one or more mutual funds. Mutual funds are groups of individual equities (stocks), the make-up of which is closely managed in an effort to maximize returns. The individual stocks in any mutual fund can change regularly.
This introduces an element of risk - sometimes significant risk. So, if you have your structured settlement money in a structured settlement mutual funds set-up, you have the potential for higher rates of return, but you also incur more risk that you'll lose some of your money.
In most structured settlements, the annuity that is set up is guaranteed. You are assured of getting the same amount, month in and month out, until the settlement money runs out. It's a good option for those seeking to avoid any risk.
As you've read until now, structured settlement mutual funds is a subject that needs knowledge and effort to work around. And the information in this article was gathered from several resources.
There are some more gems of wisdom in what follows - keep reading.
Structured settlement mutual funds are not guaranteed. The upside is the potential for earning more if the mutual fund's value increases. It's like getting a raise, but it isn't a sure thing.
From a tax standpoint, income you receive from a fixed annuity is tax-free (in most cases). However, structured settlement mutual funds are subject to capital gains taxes and the possibility of some income taxation. Keep in mind that if your mutual fund loses money, the losses can be written off of your tax bill (under most circumstances), so it's not all bad if things don't go well.
Choosing a standard structured settlement fixed annuity means you are locked into a set payment amount and schedule. If your needs change down the road, this may cause you some financial hardships. With structured settlement mutual funds, you are allowed to move money around (within certain strict limits) from fund to fund. This will allow you to adapt to changes more readily.
As should be clear by now, this is not an easy decision. There are many pros and cons, whether you choose structured settlement mutual funds, the fixed annuity option, or any other alternative. This is one reason why it's a smart move to enlist the services of a competent lawyer who specializes in this area of the law. It's also wise to educate yourself as thoroughly as possible before making the final decision.
The day will come when you can use something you read here to have a beneficial impact. Then you'll be glad you took the time to learn more about structured settlement mutual funds.
Showing posts with label mutual funds. Show all posts
Showing posts with label mutual funds. Show all posts
Thursday, March 13, 2008
Equity Linked Mutual Funds Saving Schemes
Tax planning has changed radically over a period of time. Since its time for filling income tax returns for 2007-2008 as the end date (31st March '08) is approaching. As a tax payer you need to understand the best way through which you can make use of the exemptions provided by the government. Earlier people had limited choice of tax saving instruments to be used for the purpose of tax planning. But now with the ELSS (Equity Linked Saving Schemes) launched by most of the mutual fund companies, the whole approach towards tax saving has changed. With mutual funds tax planning had become more important part of over all investment planning. With equity linked saving schemes the tax exemptions can be used in a manner such that you not just disciple your investments but also create good corpus through equity investment.
Tax planning for resident Indians
We recommend tax saving funds, also referred to as Equity-Linked Saving Schemes (ELSS). One such reason is that their benefits are too much to ignore as they hold almost all the benefits of an equity mutual fund.
For one, they do not have any restrictions. If you choose to, you can invest the entire Rs 1 lakh available under Section 80C in these ELSS funds.
They give you the benefit of higher returns. You can get 8 per cent with your PPF and NSC. But if you can get a 40-50 per cent return, coupled with a tax benefit, what's wrong with it?
How do you invest in an ELSS scheme? It is as simple as investing in any other mutual fund schemes. You just need to fill the form of particular ELSS scheme in which you want to invest. Submit it through any transaction point with the required document i.e. usually PAN card and KYC form. That's it your work is done.
The benefit 3 Years lock in period for ELSS schemes.
Secondly, if you hate blocking your money for years on end, then this one surely made for you. The lock-in period for ELSS funds is just three years. When you sell after three years, you pay no capital gains tax. So, you get the tax benefit when investing and you pay no tax on your profits. The best way to invest in a mutual fund is investing systematically through out the year using SIP. So you commit to putting away a fixed amount every month in mutual funds. This is an automatic savings habit that will hold you in the long run and help you not only to save but also invest regularly and continuously in the capital market through equity linked saving schemes (ELSS). You need to be consistent in your investments to do well. The wonders which a disciplined investment can do cannot be replicated by even the best of investment strategies.
Want to know about the top mutual funds for Tax Saving?
Most of the Mutual fund companies have come out with tax saving funds. They are Equity Linked Saving Schemes (ELSS). The funds collected under this tax saving schemes are invested in equity instrument, thus providing better returns. Many of these ELSS funds generate as much returns as a diversified equity fund. With the awareness been increasing among the investor class, the equity linked saving schemes are gaining popularity among the investor class.
Take step towards informed mutual fund investment by investing with care and due diligence.
To know more you can visit Godmind and get the collection of recommended tax saving funds which is been provided by Godmind advisors. Also you can ask the Mutual fund Advisors on which ELSS (Equity linked saving scheme) fund to invest in.
You can know more through mutualfundadvisorindia.in website. In this you can get the understanding of selecting any scheme and filling the form.
Dipendra Nathawat - Godmind Mutual Fund Advisor.
Tax planning for resident Indians
We recommend tax saving funds, also referred to as Equity-Linked Saving Schemes (ELSS). One such reason is that their benefits are too much to ignore as they hold almost all the benefits of an equity mutual fund.
For one, they do not have any restrictions. If you choose to, you can invest the entire Rs 1 lakh available under Section 80C in these ELSS funds.
They give you the benefit of higher returns. You can get 8 per cent with your PPF and NSC. But if you can get a 40-50 per cent return, coupled with a tax benefit, what's wrong with it?
How do you invest in an ELSS scheme? It is as simple as investing in any other mutual fund schemes. You just need to fill the form of particular ELSS scheme in which you want to invest. Submit it through any transaction point with the required document i.e. usually PAN card and KYC form. That's it your work is done.
The benefit 3 Years lock in period for ELSS schemes.
Secondly, if you hate blocking your money for years on end, then this one surely made for you. The lock-in period for ELSS funds is just three years. When you sell after three years, you pay no capital gains tax. So, you get the tax benefit when investing and you pay no tax on your profits. The best way to invest in a mutual fund is investing systematically through out the year using SIP. So you commit to putting away a fixed amount every month in mutual funds. This is an automatic savings habit that will hold you in the long run and help you not only to save but also invest regularly and continuously in the capital market through equity linked saving schemes (ELSS). You need to be consistent in your investments to do well. The wonders which a disciplined investment can do cannot be replicated by even the best of investment strategies.
Want to know about the top mutual funds for Tax Saving?
Most of the Mutual fund companies have come out with tax saving funds. They are Equity Linked Saving Schemes (ELSS). The funds collected under this tax saving schemes are invested in equity instrument, thus providing better returns. Many of these ELSS funds generate as much returns as a diversified equity fund. With the awareness been increasing among the investor class, the equity linked saving schemes are gaining popularity among the investor class.
Take step towards informed mutual fund investment by investing with care and due diligence.
To know more you can visit Godmind and get the collection of recommended tax saving funds which is been provided by Godmind advisors. Also you can ask the Mutual fund Advisors on which ELSS (Equity linked saving scheme) fund to invest in.
You can know more through mutualfundadvisorindia.in website. In this you can get the understanding of selecting any scheme and filling the form.
Dipendra Nathawat - Godmind Mutual Fund Advisor.
Friday, February 22, 2008
Investor Valued In Mutual Funds
The long term value investor seems to get a bad name attached to it in a lot of investment books and web sites these days. There are plenty of ways to make money in the stock market and buying and selling stocks as short term investments works for some investors. I even do it some myself with a few stocks I own. I would venture to guess the average investor, who doesn't have time to research stocks every day, is better off in a long term strategy when it comes to buying stocks. This doesn't mean you are buying and holding until death do us part as some of these investment books and sites would have you believe. It simply means that nobody can pick tops and bottoms so you are better off staying in the game the whole time rather than jumping in and out every other week.
I know there are several factors to consider when deciding what kind of strategy you want to use when investing. For example, risk tolerance, years to retirement, quality of life after retirement and many others, but as a general rule long term value investing is the easiest way to a good return. It might be a little old school and not as sexy as trying to grab the next hot IPO, but you also won't be gambling on a long shot with your hard earned money.
Now I'm not saying you shouldn't buy some growth stocks, in fact, I think it serves you well to have value mixed in with growth. You have to be on top of those growth stocks though because the shelf life is shorter and more volatile than a value stock. Eventually the growth rate and PE have to come down so just be on your toes before the shoe drops.
A long term value investors still needs to watch his or her portfolio carefully and try and stay diversified. You want to make sure you lighten your load in sectors and industries that are not working and redistribute to areas that are performing better. You still will want to stay diversified, but there is no need to be overweight in underperforming industries. A lot of web sites and books seem to suggest that when a value stock is purchased it is held for life and this simply is not true. You can move in and out of value stocks when you think they have run their course. All I know is Warren Buffett has made boat loads of money while investing in value stocks.
A value stock might not get you one of those rare 900% or higher returns on your money in a couple years. It also might not be the hot topic at the next cocktail party, but it does give you a better chance of beating the indexes if you do your homework. It's much easier to pick a good quality stock based off steady increasing earnings than to guess what a new high flying company will do with no previous history to gauge off.
Sometimes it might not be the most glamorous route to the finish line, but the chances of you finishing the race the way you want too are pretty good with a long term value stock strategy.
I know there are several factors to consider when deciding what kind of strategy you want to use when investing. For example, risk tolerance, years to retirement, quality of life after retirement and many others, but as a general rule long term value investing is the easiest way to a good return. It might be a little old school and not as sexy as trying to grab the next hot IPO, but you also won't be gambling on a long shot with your hard earned money.
Now I'm not saying you shouldn't buy some growth stocks, in fact, I think it serves you well to have value mixed in with growth. You have to be on top of those growth stocks though because the shelf life is shorter and more volatile than a value stock. Eventually the growth rate and PE have to come down so just be on your toes before the shoe drops.
A long term value investors still needs to watch his or her portfolio carefully and try and stay diversified. You want to make sure you lighten your load in sectors and industries that are not working and redistribute to areas that are performing better. You still will want to stay diversified, but there is no need to be overweight in underperforming industries. A lot of web sites and books seem to suggest that when a value stock is purchased it is held for life and this simply is not true. You can move in and out of value stocks when you think they have run their course. All I know is Warren Buffett has made boat loads of money while investing in value stocks.
A value stock might not get you one of those rare 900% or higher returns on your money in a couple years. It also might not be the hot topic at the next cocktail party, but it does give you a better chance of beating the indexes if you do your homework. It's much easier to pick a good quality stock based off steady increasing earnings than to guess what a new high flying company will do with no previous history to gauge off.
Sometimes it might not be the most glamorous route to the finish line, but the chances of you finishing the race the way you want too are pretty good with a long term value stock strategy.
Links Between Mutual Funds And Stock Market
The Idea:
In my everyday perusal of the stock market I sometimes come across a stock whose current market value appears low and I of course wonder, "What is wrong with this stock?" A little research sometimes shows an obvious reason, but often it does not. A little more research and I can determine how secure this stock is as an investment, and if all looks good I make a purchase. Some of my best gains have come in this way.
The Problem:
The problem, if there is a problem, with investing in this manner is that it is often difficult to find these "bargains". With thousands of stock to choose from I don't have time to go through them all. So, question: How to make a quick determination on any given day as to what stocks may be undervalued? A method I have found to be quite useful is to compare the stock to the others in it's index.
A Solution:
The theory is that if ABC company makes widgets and the index comprised of all the widget making companies is doing well (i.e. people are buying widgets), then ABC should also be reaping the rewards. Low and behold after months of tracking this type of data it appears this theory is sound.
My best, unsubstantiated, guess for this behavior is due to what I would call "lag" time in the market. What appears to be happening is if ABCs clones or ABC itself hasn't yet noticed or reported the improvement, or, and this does happen, the market hasn't noticed that it has, you get lag.
The Result:
This lag period can last from days to a month, but when the market finally figures it out, and it almost always does (assuming I have done my research and can find no other factors keeping it down) my investment quickly pays off. My best analogy of this behavior is the old adage I learned in science class "Nature abhors a vacuum".
Uses:
# A very useful artifact of this calculation is that the short-term correction is often quite predictable. If an index is doing well but a given stock in the index is down say 5% for the past week, I can usually expect a 5 to 6% gain to be upcoming.
# It also is useful to determine a relative low in the price of a stock. Lets say I have been following ABC for some time and I believe it prudent to invest in some of its shares. I want to buy when the price is low, but when does this occur. No one can tell you exactly, but when it starts to appear as undervalued in it's own index you can be fairly certain it's not going to stay down much longer.
This strategy is of course highly speculative (notice the number of time I said 'often' or 'usually' in this article) and in no way replaces the necessary research (i.e. infrastructure, financial standing, industry, the market as a whole, various trends currently affecting the market, etc.). Performing this calculation does not render a "Pick". However, as a tool, to narrow down the universe that comprises the stock market into a short, manageable list, it is quite useful.
Conclusion:
Assuming this approach interests you then you may ask, how does an individual investor accomplish this task? Most investors already have a sector or index they follow closely and thus know how it has been performing. It is fairly simple to determine the overall trend of an index (try http://biz.yahoo.com/ic to follow indexes) and then see how each individual stock is performing. I have found it even more helpful, and much faster, to break down the individual indexes and stocks by different time ranges (ex. Index over the past 6 months and the stock over the past week) and then list these stocks on a day-by-day basis. With this daily list I can quickly pick out the potential "bargains" and get to work deciding which will be the most productive buy.
In my everyday perusal of the stock market I sometimes come across a stock whose current market value appears low and I of course wonder, "What is wrong with this stock?" A little research sometimes shows an obvious reason, but often it does not. A little more research and I can determine how secure this stock is as an investment, and if all looks good I make a purchase. Some of my best gains have come in this way.
The Problem:
The problem, if there is a problem, with investing in this manner is that it is often difficult to find these "bargains". With thousands of stock to choose from I don't have time to go through them all. So, question: How to make a quick determination on any given day as to what stocks may be undervalued? A method I have found to be quite useful is to compare the stock to the others in it's index.
A Solution:
The theory is that if ABC company makes widgets and the index comprised of all the widget making companies is doing well (i.e. people are buying widgets), then ABC should also be reaping the rewards. Low and behold after months of tracking this type of data it appears this theory is sound.
My best, unsubstantiated, guess for this behavior is due to what I would call "lag" time in the market. What appears to be happening is if ABCs clones or ABC itself hasn't yet noticed or reported the improvement, or, and this does happen, the market hasn't noticed that it has, you get lag.
The Result:
This lag period can last from days to a month, but when the market finally figures it out, and it almost always does (assuming I have done my research and can find no other factors keeping it down) my investment quickly pays off. My best analogy of this behavior is the old adage I learned in science class "Nature abhors a vacuum".
Uses:
# A very useful artifact of this calculation is that the short-term correction is often quite predictable. If an index is doing well but a given stock in the index is down say 5% for the past week, I can usually expect a 5 to 6% gain to be upcoming.
# It also is useful to determine a relative low in the price of a stock. Lets say I have been following ABC for some time and I believe it prudent to invest in some of its shares. I want to buy when the price is low, but when does this occur. No one can tell you exactly, but when it starts to appear as undervalued in it's own index you can be fairly certain it's not going to stay down much longer.
This strategy is of course highly speculative (notice the number of time I said 'often' or 'usually' in this article) and in no way replaces the necessary research (i.e. infrastructure, financial standing, industry, the market as a whole, various trends currently affecting the market, etc.). Performing this calculation does not render a "Pick". However, as a tool, to narrow down the universe that comprises the stock market into a short, manageable list, it is quite useful.
Conclusion:
Assuming this approach interests you then you may ask, how does an individual investor accomplish this task? Most investors already have a sector or index they follow closely and thus know how it has been performing. It is fairly simple to determine the overall trend of an index (try http://biz.yahoo.com/ic to follow indexes) and then see how each individual stock is performing. I have found it even more helpful, and much faster, to break down the individual indexes and stocks by different time ranges (ex. Index over the past 6 months and the stock over the past week) and then list these stocks on a day-by-day basis. With this daily list I can quickly pick out the potential "bargains" and get to work deciding which will be the most productive buy.
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