History Of Mutual Fund Analysis
Arthur P. Mellard -
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Learn more about the history of mutual fund analysis.
It may well influence your future investment
strategy.
The history of mutual fund analysis probably began in 1924 when
the very first mutual fund was created by three Boston
securities executives when they pooled their money together to
form Massachusetts Investor Trust.
The 200 individuals who put up the original seed money of
$50,000 certainly did some mutual fund analysis before they
invested their hard earned money. This very first mutual fund
put a big smile on the face of those 200 investors in the first
year by increasing the assets to $392,000.
The Stock Market Crash Of 1929
There almost were not any mutual funds remaining for analysis
after the crash heard around the world happened in 1929. This
has turned out to be the worst financial event ever to affect
people all around the world.
Four years later in 1933 Congress passed the Securities Act
and, one year later, the Securities Exchange Act. These acts
required that each mutual fund be registered with the Security
Exchange Commission and prospective investors are given a
prospectus. A prospectus is an excellent tool in mutual fund
analysis because it provides information about the mutual
fund's costs, investment objectives, risks, and past
performance.
Today
Today in the US there are over 10,000 mutual funds available
for analysis if you have the time. These mutual funds are
collectively worth more than 7 trillion dollars divided by 83
million investors.
Every one of these 10,000 mutual fund companies are required to
provide potential investors with a prospectus and also comply
with the detailed guidelines contained in the Investment
Company Act of 1940.
Investment Company Act Of 1940
This act went a long way in installing confidence in the
investor when he invested in mutual funds. The new law set
separate standards by which investment companies should be
regulated. The act's purpose as stated in the bill was to
protect the national public interest as well as the interests
of the investor.
The act regulated conflicts of interest in mutual funds and
security exchanges. The act of 1940 aided the person in mutual
fund analysis because he was now provided with material details
about each mutual fund company.
Individual Retirement Account (IRA)
The single biggest event to affect the profession of mutual
fund analysis occurred in 1981 when the Individual Retirement
Act was passed. This act allowed individuals who were already
enrolled in a corporate pension plan to invest up to $2000 in a
mutual fund. Now these people started to do their own mutual
fund analysis instead of paying a broker for their opinion. In
their own minds they felt they could own a small piece of a
large number of companies.
RESOURCE BOX
Mutual Fund Performance.net
provides detailed information on research, ratings and
articles, all designed to help you invest confidently in mutual
funds.
Source:
http://www.mutualfundperformance.net/Mutual-Fund-Analysis.html
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