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The Folio Phenomenon: New Freedom to Customize Your Investments and Increase Your Wealth (2002)

English | May 2002 | ISBN: 0793154103 | 224 Pages | PDF | 580 KB

With folio investing, you can build your own “mini” mutual fund containing up to 50 stocks in companies you select. For investors with modest sums to invest, owning individual stocks once meant facing the risk of putting all their investment eggs in a limited number of baskets. Mutual funds provided investors with one more option, allowing them to spread their risk by owning a broad cross-section of companies. However, with mutual funds, investors have no control over which companies they own or how and when shares are sold, and they often end up with a tax burden based on the activities of the overall fund. To combine the benefits of owning risk-spreading mutual funds and the control of owning individual stocks seemed like an impossible dream. Not any longer. Visionary online investment companies have created a new vehicle-the folio-that brings the best of both worlds to the reach of savvy investors. Folios allow investors to work with a given dollar amount, thus enabling them to buy fractional shares of stock in as many as 50 different companies. Investors are charged a modest fee-as little as $6.99 a month-that enables them to trade liberally within the folio without incurring the transaction fees paid to regular stockbrokers. Independent stock and mutual fund analyst Gene Walden offers insights into this new hybrid investment vehicle. In plain language, he outlines the advantages and disadvantages, explains what folios are, how they work, and how they came to be, and he provides insights from the leading players in this budding new industry. He discusses everything investors need to know and constructs a number of sample folios, including: Powering up with a utility folio Selecting a folio of blue chip all-star stocks Investing