Which investment fund to choose?

Investment funds - what to choose?

Choice of investment fund

In the beginning, you need to determine the investment time and to consider how long you can invest money.

Warning! The longer the savings are kept in the funds, the more risky the option may be.

You can not invest in one specific fund. It does not make sense. If, for example, the selection goes exclusively to bond funds, then profit will be low, and stock funds will be a big risk. That's why it's best to split your savings into two and put one in safe money and the other to invest risky.

Then you need to choose the Investment Fund Company. The good thing is to choose one that will also give us access to the fund over the internet, because usually this means lower commissions.

Remember! It is worth checking whether a given company has so called. umbrella fund, in which are so-called. Subfunds with different investment strategies. It causes that you do not have to pay the so-called. Beam tax when you want to change a subfund (eg take out money from the stock fund and transfer them to the bond). 

Warning! In any other case (without the "umbrella") the beams tax is levied.

When choosing an investment fund, you have to look at its results, which express the rate of return, so simply put the percentage of profit you can count on while investing your money.

By analyzing the rate of return, it is assessed which fund at the time allowed more to earn and which less.

Warning! The rates of return can be found in the press on the economics pages. They are most often given in daily, monthly, three-month, annual and triennial terms. The longer the perspective, the better you can rate them.

You also have to check whether your fund's returns are changing often because it gives you insight into how stable your funds are.

Warning! The less fluctuations in interest rates, the better.

Another important thing to pay attention to is the amount of fees that are charged on a one-off basis when purchasing fund units and a fixed fee (so-called management fee), which is charged daily.

If the investment fund is already selected, it is time to start an investment account.

Warning! Where to buy shares of a selected investment fund can be checked, for example, on the investment fund company website or by calling the investment fund company.

You will need to go to a bank, brokerage office, financial advisor or directly to the investment fund company. There are customer service points, where there are offers of funds.

If the investment fund decision is made, you can open an investment account (sign a brokerage agreement).

Then you can deposit money into the indicated account at the cashier or transfer (you have to provide the account number) and then you will receive the so-called. units. The unit price is determined daily based on the value of the securities. When the value of a stock or bond increases, the unit price increases.

Warning! Very popular lately are online investment accounts that are cheaper than traditional ones. To sign up just fill out the registration form and sign the contract in the traditional way.

Fees related to investment funds

1. Handling fee - one-time fee when purchasing units. The amount of the fee depends on the type of fund chosen and the amount of money paid. The rule is - the safer the fund and the higher the amount, the lower the fee.

When a secure fund (bond, money) is selected, you need to pay a maximum of 1% of the invested amount. In the case of funds with higher investment risk (sustainable or share) the fee is 3-4.5%.

2. Management fee - the fee charged by the fund every day (this is the type of commission on the earned profits), but calculated on a yearly basis. The amount of this fee depends on the type of fund. This fee is usually not seen because it is not included in the price of the unit.

3. Payment for early withdrawal (before the end of the year). Some funds get it. At any time you can withdraw your money. You only need to submit (in person, via the internet or telephone) a request for redemption of units. Within a few days, cash is received into your account.