Mutual Funds - Its Humble Beginnings
If you talk about investment options, one popular suggestion that will always be around is mutual funds. Mutual funds are very popular today because it allows the biggest return of investment if managed properly. Unlike certificates of deposit and money market accounts which offer ridiculously low interest rates, a mutual fund account puts the best interest of investors first and works to get maximum gains for them.
Getting started with mutual funds is a good way to test the waters, so to speak. Bonds and stocks are great, no question about it, but in order to succeed with trading them you have be really adept at making decisions concerning your investment. With mutual funds, all you have to do is to watch your money grow under the skillful maneuver and decision-making of a professional fund manager who sees to it that the fund's assets are spread over a diverse portfolio of investments to minimize risks.
In order to fully grasp the concept of mutual funds, we need to take a look at its humble beginnings. Some historians give credit to a Dutch merchant named Adriaan van Ketwitch for the concept of mutual funds. Others, however, pinpoint the Netherlands as the birthplace of the mutual fund concept at the time when King William I launched several closed-end investment companies.
Nevertheless, the beginnings were soon forgotten as the idea reached Great Britain and France and became an instant hit. It was only in the 1890's that the United States caught on with the idea of mutual funds. The mutual funds of the past are so much different from what we have today. It was only with the establishment of the Alexander Fund in Pennsylvania that modern mutual funds came to be. In the years following the establishment of the Alexander Fund, modifications were made to improve the investment opportunity with the ability to do withdrawals on request and semi-annual issues.
In the year 1924, another fund known as the Massachusetts Investors Trust was created which simultaneously signified the beginning of the modern mutual fund. In a year's time, the fund accumulated an asset base of $400,000.00 with 200 shareholders. Four years after its establishment, the Fund offered its shares to the public. At the same time, another fund named as the Wellington Fund was formed and was the first one to include stocks and bonds as investment options. This heightened the demand for stocks and likewise increased its prices. Thus, the year 1928 was considered to be one of the most illustrious years in the mutual fund history.
Then came the Wall Street Crash of 1929, the worst stock market crash which lead to the Great Depression in the United States. Amidst the negativity abound during that time, a positive thing emerged when the government finally took notice of the mutual fund industry and passed laws to protect those who want to invest in the said industry.
Under the governing laws, investors soon renewed their trust and started trading again. This was the start of a flourishing mutual fund industry. From then on, the industry continued to be profitable and attracted an increasing number of investors each year. But more is yet to come.
Today, it continues to be the leading investment option of investors. The mutual fund industry withstood the changes of time and economy throughout the years, emerging stronger every time. This is one reason why people are investing in mutual funds because they know that it can stand the test of time with a big potential to grow even more. - 23167
Getting started with mutual funds is a good way to test the waters, so to speak. Bonds and stocks are great, no question about it, but in order to succeed with trading them you have be really adept at making decisions concerning your investment. With mutual funds, all you have to do is to watch your money grow under the skillful maneuver and decision-making of a professional fund manager who sees to it that the fund's assets are spread over a diverse portfolio of investments to minimize risks.
In order to fully grasp the concept of mutual funds, we need to take a look at its humble beginnings. Some historians give credit to a Dutch merchant named Adriaan van Ketwitch for the concept of mutual funds. Others, however, pinpoint the Netherlands as the birthplace of the mutual fund concept at the time when King William I launched several closed-end investment companies.
Nevertheless, the beginnings were soon forgotten as the idea reached Great Britain and France and became an instant hit. It was only in the 1890's that the United States caught on with the idea of mutual funds. The mutual funds of the past are so much different from what we have today. It was only with the establishment of the Alexander Fund in Pennsylvania that modern mutual funds came to be. In the years following the establishment of the Alexander Fund, modifications were made to improve the investment opportunity with the ability to do withdrawals on request and semi-annual issues.
In the year 1924, another fund known as the Massachusetts Investors Trust was created which simultaneously signified the beginning of the modern mutual fund. In a year's time, the fund accumulated an asset base of $400,000.00 with 200 shareholders. Four years after its establishment, the Fund offered its shares to the public. At the same time, another fund named as the Wellington Fund was formed and was the first one to include stocks and bonds as investment options. This heightened the demand for stocks and likewise increased its prices. Thus, the year 1928 was considered to be one of the most illustrious years in the mutual fund history.
Then came the Wall Street Crash of 1929, the worst stock market crash which lead to the Great Depression in the United States. Amidst the negativity abound during that time, a positive thing emerged when the government finally took notice of the mutual fund industry and passed laws to protect those who want to invest in the said industry.
Under the governing laws, investors soon renewed their trust and started trading again. This was the start of a flourishing mutual fund industry. From then on, the industry continued to be profitable and attracted an increasing number of investors each year. But more is yet to come.
Today, it continues to be the leading investment option of investors. The mutual fund industry withstood the changes of time and economy throughout the years, emerging stronger every time. This is one reason why people are investing in mutual funds because they know that it can stand the test of time with a big potential to grow even more. - 23167
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posted by X - Men @ 1:55 AM
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