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Investing in Mutual Funds

Horizontales
Consider this carefully before acquiring and holding an investment. In an unpredictable world, this may be the only predictable element of fund performance.
This type of fund holds a mix of stocks, bonds and cash.
Buying an index fund and holding over the long term. Costs to the investor are kept to a minimum. Trading is also kept to a minimum.
Mutual Funds allow small investors to enjoy a degree of this by owning hundreds of stocks they otherwise could not enjoy on their own.
These types of funds invest in the stocks of foreign companies, ex-U.S.
Considered a defensive policy of investing by periodically investing equal dollar amounts in an investment.
Valuable source of information on every mutual fund. A necessary read in order to assess the suitability of a fund to the investor's needs.
Investing in this type of mutual fund is usually in a high number of stocks at a low cost.
Investment that provides diversification that reduced risk compared to owning individual stocks.
Calculated as the total percentage of fund assets used for administrative, management, advertising, and all other expenses. A ratio of 1% annually is considered high.
Verticales
The Financial Industry Regulatory Authority. A government authorized not-for-profit organization that oversees US broker-dealers.
These are funds who might invest in only one sector, such as health care or energy.
Front-end, redemption charges and expense ratios are too often overlooked by investors.
Also too often overlooked by investors. Referred to as the frequency of trades within the portfolio, which tends to increase costs, and may decrease the total return.
Mutual Funds make regular distributions. If the fund is held in a taxable account, the owner must pay taxes. It is advisable not to invest in a fund just before the fund makes its distribution.
Typically low-yield investment intended to be safe, short-term and liquid.
A portfolio manager who picks only particular stocks for the fund. The expense ratio is higher. Sometimes frequent trading occurs. Promise to outperform index funds, but majority do not outperform.
For actively managed funds, any interested investor should examine whether this particular manager invests his own money in the fund.
Financial Planner who claims to act solely in the client's best interest. Get this in writing.
This refers to the amount of time the fund manager has been with the fund. The skill of the manager may depend on the amount of time with the fund.