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The main goal of this paper is to provide an extensive base upon which relevant and reliable investment decisions will be made. It should be noted that the entire research will focus on mutual forms of investments as well as the respective forms of information obtained when analyzing the given data in form of a graph altogether. In the initial section of the assignment, it is required that a vast and strong position be established concerning the most effective investment decisions. Moving forward, the assignment will expound on the different forms of phenomenon within the investment market.
There is a clear and determinable way of behavior for the mutual funds investment. It is clear that the returns of the invested funds take to complete a certain form of cycle that depicts: investment initiation, investment surge and investment maturity. This is depicted by the results of the graph as investment year’s progresses and so on.
In the investment initiation stage, the investor is perceived as having to take the risk by attributing all the financial resources at hand into an investment managed mutual fund program. In this stage, as depicted by the graphs, the market at hand is active and rewarding all the same. This drives to even more investment portfolio applications. It is thus clear that with the advancements made during the investing period, the rate of return diminishes substantively altogether. This may be attributed to several factors which are not limited to concentrated mutual funds market as well as the incapacity of the mutual fund investor to release the investment portfolio for sale. It is always perceived to be so since they are eager and optimistic about the future of a promising market all the same. This phase is described as the investment surge and it takes an extensive period of time before the investments starts to materialize, thus the maturity stage. During maturity, the invested portfolio is perceived as starting to gain value especially that the funds are determined by the future present value methodology which goes beyond present benefits or rather the amounts of profits (Goetzmann, Geenwald and Huberman, 1992).
With the aforementioned descriptions about the behavior of mutual funds’ investments it is safe to indicate that the ability to purchase or rather invest on the mutual fund is dependent upon two phenomenon which are not limited to past performance of the mutual fund manager to invest in a certain capability as well as the methodology deployed when charging the expenses which a potential investor decides to execute altogether. These high fees which include commissions paid to brokers and loading fees deter potential investors from such mutual programs.
In my opinion, it is safe to implicate the fact that the graphs depict a consistent market efficiency approach. As described earlier, these graphs fall within the three stages of mutual fund investing behavior. It is safe to indicate that the three stages: investment initiation, surge and maturity is a recognizable feature within the investment portfolios altogether. When making investment decisions, it is normally expected that the market behave in a much determinable occurrence so that consistency is portrayed altogether. When potential investor decides to make investment decisions they are fully aware that they are engaging in a substantial amount of risks so that surges may mature into either a positive maturity phenomenon or the opposite which is also possible. Positive maturity indicates that the percentage of return is portrayed at a steady rate while negative maturity indicates that the investment portfolio has failed in its capacity to translate into profits. All these descriptions befit an investment market (Brown, and William, 1995).
In my opinion, I think that the Vanguard 500 form of equity mutual investing is the best option as compared to the S&P 500. This is because of the various advantages attributed to it as a whole. First, the fees paid to the professionals by an investor are much more affordable as compared to the latter. It is also safe to implicate that since the mutual program has been on the market for a substantial period of time, it therefore means that investors are exposed to critical forms of information about the program which they can use to compare and contrast before deciding on whether or not to invest: it allows for easier comparison approach especially because it possesses past performance records which can be tracked over a reliable period of time (Capon, Fitzsimons and Prince, 1996).