The Beginnings of Mutual Funds
It is undeniable that mutual funds have become really popular nowadays. And this is not without good reason - mutual funds give the biggest return of investments if properly managed. Compared to certificates of deposit and money market accounts which offer really low interest rates, a mutual fund works for its investors in order to get maximum gains.
Aside from traditional investment options such as money market accounts and certificate of deposits, a mutual fund is one investment opportunity a novice can take part of. Stock markets and bonds are good investment options, but not all people have the time to learn the ins and outs of the trade. Thus, a mutual fund is perfect for a beginner as it allows you to test the waters before putting a huge amount of money in. A good advantage of mutual funds is the fact that it spreads its assets over several investment vehicles to minimize risks.
To understand mutual funds better, it is necessary that we take a look at how it has developed over the years. Historians believe that the Netherlands is the official birthplace of the mutual fund, crediting King William I when he launched his closed-end investment companies in 1822. Others say, however, that it was a Dutch merchant named Adriaan van Ketwich who was responsible for creating the idea of a mutual fund in 1774.
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.
It was only when the Massachusetts Investors Trust was established that the modern mutual fund came into existence in 1924. And about a year later, the Trust has grown to acquire almost $400,000.00 in assets with 200 shareholders. By 1928, the fund went public. In the same year, the Wellington Fund was established and was the first one to include stocks and bonds in their investments. Because of this, the value of stocks increased rapidly making 1928 one of the best years in the history of mutual funds.
However, in 1929, Wall Street experienced the most devastating stock market crash in the US. The prices of stocks and demand of goods fell swiftly. This was also believed to have caused the Great Depression. But despite all the gloom, one positive thing became the effect of the stock market crash " the government finally noticed the mutual fund industry and passed laws to protect the investors.
With these laws enacted, the investors slowly renewed their confidence in the stock market which made the mutual fund industry flourish again. The rest they say is history. From the 60s to the 90s mutual funds continue to catch the publics attention. But this is just the beginning.
Now, a mutual fund is considered as a sound investment from investors all over the world. Whichever way you look at it, mutual funds still has a lot of room to grow in. And the good thing about it is that you can profit from this industry without risking too much. - 23204
Aside from traditional investment options such as money market accounts and certificate of deposits, a mutual fund is one investment opportunity a novice can take part of. Stock markets and bonds are good investment options, but not all people have the time to learn the ins and outs of the trade. Thus, a mutual fund is perfect for a beginner as it allows you to test the waters before putting a huge amount of money in. A good advantage of mutual funds is the fact that it spreads its assets over several investment vehicles to minimize risks.
To understand mutual funds better, it is necessary that we take a look at how it has developed over the years. Historians believe that the Netherlands is the official birthplace of the mutual fund, crediting King William I when he launched his closed-end investment companies in 1822. Others say, however, that it was a Dutch merchant named Adriaan van Ketwich who was responsible for creating the idea of a mutual fund in 1774.
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.
It was only when the Massachusetts Investors Trust was established that the modern mutual fund came into existence in 1924. And about a year later, the Trust has grown to acquire almost $400,000.00 in assets with 200 shareholders. By 1928, the fund went public. In the same year, the Wellington Fund was established and was the first one to include stocks and bonds in their investments. Because of this, the value of stocks increased rapidly making 1928 one of the best years in the history of mutual funds.
However, in 1929, Wall Street experienced the most devastating stock market crash in the US. The prices of stocks and demand of goods fell swiftly. This was also believed to have caused the Great Depression. But despite all the gloom, one positive thing became the effect of the stock market crash " the government finally noticed the mutual fund industry and passed laws to protect the investors.
With these laws enacted, the investors slowly renewed their confidence in the stock market which made the mutual fund industry flourish again. The rest they say is history. From the 60s to the 90s mutual funds continue to catch the publics attention. But this is just the beginning.
Now, a mutual fund is considered as a sound investment from investors all over the world. Whichever way you look at it, mutual funds still has a lot of room to grow in. And the good thing about it is that you can profit from this industry without risking too much. - 23204
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The author's website provides information about mutual funds in the Philippines and explains the mutual fund history.
posted by X - Men @ 1:16 AM
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