Actually, you are right, investing in mutual funds are all about the price of shares and the number of shares, the more shares you have and at a cheaper price you get, the better the possible returns.Originally Posted by ken123
The illustration that I gave was to give a clear and simple picture about how mutual funds work.
In an ideal scenario, your money will grow in a compounding way provided that you will not redeem sooner or later. However, in reality, it doesn't work that way because of the fluctuations, the NAVPS could either go all the way up or down anytime but for illustration's sake (keeping the NAVPS and rate of return fixed to make it simple), we could compute it in a compounding way.
A much more realistic approach in computing returns (but still isn't that accurate) is to compute the growth/loss every month based on the rate of return. It's still isn't accurate because mutual funds are cost averaged, meaning the return will be based on the average of the gains and losses over a period of time.
The simplest way to compute for the gain is to invest and not add any amount. In that way, you could simply multiply the amount invested with the rate of return over a period of time and add the initial investment and the rate of return. It basically follows the simple interest formula. But since in reality people are investing either in a fixed interval or anytime and the rate of returns fluctuates, it makes calculations complicated if we will base it on the rate of return.
The simplest way to compute for the growth is to multiply the number of shares to the current NAVPS and subtract the total investment (initial investment + additional investments).
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11-25-2010, 07:48 AM #141C.I.A.
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Last edited by makie; 11-25-2010 at 07:53 AM.
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11-25-2010, 08:00 AM #142
Tama ang sinabi, moh, pero yung compouding effect hindi kagaya nasa bank, ang compouding effect niya ang yung sa value ng navps, investing in MF is CAPITAL GAINS, not LENDING business. Example PhilEquity 1995 Php1/share, ngayon, ay Php 20/share na, di ba 20 times yun ang na invest mo kung nag invest ka noong 1995, pwdi mu makuha yung compouding interest rate niya using these formula Originally Posted by ken123
F=P(i+1)^n
where F = Future Amount
P = Principal Amount
n= number of years
i = compouding interest/year
So unknown variable mo ai, yung i, find for i. Known values ai, F,P, and n. Happy Algebra. T_T!
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11-25-2010, 08:02 AM #143Elite Member
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Latest update of Mutual Funds as of November 24, 2010 (Wednesday)
Source : Investment Company Association of the Philippines
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11-25-2010, 08:05 AM #144
Try to look at this sample, This could answer your questions. T_T! Originally Posted by smartcool
Know the risk in Mutual Fund Investing. This is a sample for Peso/Dollar Cost Averaging.
Last edited by lorenzoleo; 11-25-2010 at 08:15 AM.
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11-25-2010, 08:53 AM #145Elite Member
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Tax Identification Number (TIN) is one of the requirements when you fill up application form of any Mutual Funds Companies like FAMI, PAMI, United Funds, Philequity,etc in accordance/required by RA 9160 or Anti-Money laundering Act of 2001.
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11-25-2010, 09:34 AM #146C.I.A.
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Saon nako pag limpyo sa ako millions ani? :P Originally Posted by wizard_jamex
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11-25-2010, 09:37 AM #147Elite Member
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Find a way, bro. =) Originally Posted by Metz
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11-26-2010, 08:01 AM #148Elite Member
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Latest update of Mutual Funds as of November 25, 2010 (Thursday)
Source: Investment Company Association of the Philippines
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11-26-2010, 07:41 PM #149
MF is really very good, no tax upon redemption. This is one vehicles where the wealthy people are hiding their wealth. T_T!
Imagine in the future all your income came from CAPITAL GAINS, Hehehe! MF, no tax, capital gain tax is very minimal. Hehehe!Last edited by lorenzoleo; 11-26-2010 at 07:44 PM.
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11-26-2010, 07:45 PM #150
MF jud bai, para limpyo inig redeem. T_T!!!!!!!!!!!!!!! No tax!!!! Originally Posted by Metz
The state of your savings does have a lot to do with how tall you walk. Your savings affect the way you stand, the way you walk, the tone of your voice, your physical well-being and your self-confidence.
A person without savings is always running. He must. He must take the first job offered, or nearly so. He sits nervously on life’s chairs because any small evergency throws him into the hands of others.
Without savings, a person must be too grateful. Gratitude is a fine thing in its place. But a constant state of gratitude is a horrible place in which to live.
A man with savings can walk tall. He may appraise opportunities in a relaxed way, have time for judicious estimates and not be rushed by economic necessity.
A person with savings can afford to resign from his job if his principles so dictate. And who can afford to quit is much more useful to his company, and therefore more readily promoted. He can afford to give his company the benefit of his most
candid judgments.
A person with savings can afford the wonderful privilege of being generous in family and neighborhood emergencies. He can take the level stare of any man... friend, stranger or enemy. That ability shapes his personality and his character.
The ability to save has nothing to do with the size of income. Many high-income people spend it all, darting through life like minnows, But as the dean of American bankers, J.P. Morgan once advised a young broker:
"Take waste out of your spending; you’ll drive the haste out of your life."
If you don’t need money for college, a home or retirement, then save for self-confidence. And with the self-esteem and peace of mind that comes from having, walk tall through life.Last edited by lorenzoleo; 11-26-2010 at 07:48 PM.
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