About Michael A. Weiss, CFA Expertise I can provide high quality answers to questions about mutual funds domiciled in the United States. Overall, I have 15 years of investment experience. I am currently the Editor of <a href="http://www.mutualfundinvestor.net/">The Mutual Fund Investor</a>, a quarterly publication that provides recommendations and commentary on various no-load mutual funds. I am also currently the Chief Investment Officer of a state registered investment advisory firm that specializes in no-load mutual funds.
Experience Overall, I have 15 years of investment experience. I am currently the Editor of The Mutual Fund Investor, a quarterly publication that provides recommendations and commentary on various no-load mutual funds. To learn more about The Mutual Fund Investor, please visit <a href="http://www.mutualfundinvestor.net/">http://www.mutualfundinvestor.net/</a>. I am also currently the Chief Investment Officer of a state registered investment advisory firm that specializes in no-load mutual funds.My mutual fund experience began at a company called Lipper Analytical Services, where I researched and wrote about mutual funds. Lipper is one of the premier mutual fund research and ratings organizations. After Lipper, I worked as an investment analyst for Merrill Lynch’s multi-billion dollar Mutual Fund Advisor and Selects Programs. I also have experience working with individual stocks and bonds. I have managed investment portfolios for both Merrill Lynch Investment Managers as well as Evergreen Investments.<BR><BR><B>Organizations</B><BR>CFA Institute
CFA Society of Philadelphia
<BR><BR><B>Publications</B><BR>The Mutual Fund Investor
<BR><BR><B>Education/Credentials</B><BR>CFA charterholder
MBA in Finance and Investments from the Zicklin School of Business at Baruch College<BR>
Expert: Michael A. Weiss, CFA Date: 8/3/2007 Subject: mutual funds
Question QUESTION: Hi. Can you tell me the difference between bond mutual funds and stock mutual funds? Thanks
ANSWER: Hi Danielle,
Thank you for your question.
Bond mutual funds are invested in bonds. There are many varieties of bond mutual funds such intermediate-term, long-term, short-term, municipal, mortgage, government, corporate, convertible, foreign, inflation protected, etc.
When you buy a bond, you are basically loaning the issuer money in exchange for a fixed payment usually every six months. With bonds, you have no ownership in the issuer.
Stock mutual funds are invested in stocks. There are a variety of different types of stock mutual funds, such as small-company, large-company, mid-sized-company, international, emerging markets, technology, healthcare, etc.
When you buy a stock, you are buying ownership in a company and you share in the growth of that company and benefit when prices rise. With stock mutual funds, you only have indirect ownership of the companies.
You can purchase no-load mutual funds that have stocks or bonds or both. You can also purchase both stock and bond mutual funds that have a sales charge. The sales charge should be in exchange for some advice (or why pay a sales charge?).
My company focuses on no-load mutual funds and if you are interested in obtaining a sample copy of my mutual fund research report you can go to www.mutualfundinvestor.net and then click on Try it Free.
I hope this helps and feel free to follow up if you have any additional questions.
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QUESTION: Ok, I have another question. I was told last year by a financial advisor that with stock mutual funds a person can expect a 10-11% yearly return. Is that true? If so, if I invest $25,000 now does that mean in 3 years it will have grown to $750,000? Or, am I calculating wrong?
Answer Hi Danielle,
Thank you for your question.
10 to 11% per year is a good long-term estimate for large-cap stocks and large-cap mutual funds. Small-cap stocks return a little more than that over time. These are only long-term estimates. Returns for any given year could be much different. In 2002, large-cap stocks lost over 20%, while in the 1990s, there were a couple of years with gains of over 30%.
I am afraid your calculation is not correct. Investing $25,000 for 3 years at 11% would give you about $34,191.
I hope this helps and feel free to follow up with any additional questions.
