Mutual Funds categories - Bond Funds, General Equity, Balanced Funds, Global/International Funds, Sector Funds and Index Funds

Mutual funds come in every possible size, shape, and color. Here are some of the general categories of mutual funds.

Bond Funds
Bond mutual funds are pooled amounts of money invested in bonds. Bonds are IOUs, or debt, issued by companies or governments. A purchaser of a bond is lending money to the issuer, and will usually collect some regular interest payments until the money is returned. Usually, the amount of interest paid (the coupon) is fixed at a set percentage of the amount invested -- thus, bonds are called "fixed-income" investments.


General Equity (Stock) Funds
Stocks represent part ownership, or equity, in corporations, and the goal of stock ownership is to see the value of the companies increase over time. Stocks are often categorized by their capitalization (or market cap) and, like many other things, come in three basic sizes: small, medium, and large. Many mutual funds invest primarily in one of these sizes and are thus classified as large-cap, mid-cap, or small-cap funds. Additionally, mutual funds are often categorized by the type of stock that is bought. Mutual fund types are generally "growth," "value," or a combination of the two, called "blend."


Balanced Funds
Balanced funds mix some stocks and some bonds. A typical balanced fund might contain about 50-65% stocks, and hold the rest of the shareholder's money in bonds and cash. It is important to know the distribution of stocks to bonds in a specific balanced fund to understand the risks and rewards inherent in that fund.


Global/International Funds
Global and international funds invest in companies whose homes are beyond the fair shores of this great nation. (There are, of course, many other great nations.) In general, international funds are much more volatile than domestic funds. International funds generally invest only in foreign companies, while global funds may invest in some U.S.-based companies in addition to foreign companies.


Sector Funds
Sector funds invest in one particular sector of the economy: technology, banking, computers, the Internet, llamas. Just kidding about the llamas. No one has yet started the Llama Fund, though it's only a matter of time given that there is a mutual fund called the Couch Potato Fund, which invests in, as far as we know, the "remote control" sector. Sector funds can be extremely volatile because the broad market will find certain sectors very attractive and very unattractive often in rapid succession (much like couch potatoes may find certain programs very attractive and very unattractive in rapid succession -- annoying the heck out of their significant others).


Index Funds
Finally, our favorite, the index mutual fund, owns a full participation in some portion of the stock market. An index fund matches the shareholdings of a target index, such as the Standard & Poor's 500 Composite Stock Price Index (S&P 500). Index funds are distinct from actively managed mutual funds in that they do not involve any stock picking by supposedly skilled professionals -- they simply seek to replicate the returns of the specific index.

Citi MTvU

The Citi mtvU Platinum Select Visa card is a credit cards for college students, that offers an interested array of perks. Like the Citi Professional Card, it is part of the Citi ThankYou Network. The card gives you 5 ThankYou Points for every dollar you spend at restaurants, bookstores, record stores, movie theaters and video rental stores. But guess what is considered a bookstore, no matter what you buy? Amazon.com! This is the same as 5% back in gift cards or 5% cash back towards your student loans.

The only problem is that there are reports that they verify if you are a student. Some get asked, many slip by. If you are a student, you also get some points for having good grades: “250 to 2,000 ThankYou Points� twice a year for a good GPA. 25 ThankYou Points� a month for paying your bill on time and not going over your credit limit.” So get a 4.0 and pay your bills and get $43 for free every year! There’s no annual fee and even no minimum income or cosigner requirement. I bet anyone under 25 gets approved for this automatically. I’m over but hey, I’m a student now

Bank Accounts and ChexSystem

If you’re chasing higher interest rates or grabbing sign-up bonuses, you might be concerned about any potential consequences from opening all those bank accounts. In my experience, there are two main factors to be aware of when you open a bank account:


Banks pulling your ChexSystems report. ChexSystems is a consumer information database used by an estimated 80-90% of all banks to help determine the risk of opening new accounts. Think of it as the bank’s version of a credit bureau. If a person commits check fraud or overdraw their account, it will be listed here. In addition, the simple act of opening or closing a bank account may be recorded in their database.


One thing that may raise up a red flag is opening up several bank accounts in a very short period of time. This is because of the connection of multiple bank accounts to a form of fraud called ‘check kiting‘. Kiting usually involves sending several checks between different banks to create an temporary surplus of money from the bank’s funds availability policies, and then cashing that out before all the checks fully clear. In the end, one of the banks is left holding the bag.


But for the most part, as long as you haven’t left any accounts in bad standing you shouldn’t run into any problems with opening up new bank accounts. I’ve opened up accounts at over 20 different banks already, sometimes two or three in one week, and have never been rejected by any of them. However, getting a negative ChexSystems record can leave you blacklisted from all the major banks. There are even specific websites that help such people find a place that will accept them.


As with credit reports, you can get a free copy of your ChexSystems report once a year.
Banks pulling your credit report. Yes, it is legal for banks to pull your credit report. There are a couple reasons they do so. First, this is another way for them to identify you and measure the risk of giving you a new account. Second, they may use this information to market other financial products like credit cards or home equity loans to you.


Before, I’ve talked about the difference between hard and soft credit pulls. Usually, bank will just perform a soft credit check, which doesn’t affect your credit score. (All those “pre-approved” credit card applications in the mail are from soft credit checks.) However, some banks also perform hard credit checks, which do hurt your credit score slightly. As none of them are offering me any credit, I’ve never understood why some major banks do this while others don’t - for example I have seen Citibank do hard pulls, but not Washington Mutual. I personally suspect that it may just be unintentional and they don’t know the difference. (And most people don’t know the difference so they don’t really get any pushback.) Although I haven’t tried, I would guess that if you spent the effort to appeal these hard checks to the credit bureaus, there may be a chance to get them removed.


To summarize, I usually try to find out first if the bank will perform a hard credit check. This isn’t an exact science, as the banks can often change their practices. If so, then I want to see it pay out at least $100. If there is no credit check, then my standards are lower. Otherwise, I don’t really worry about the number of bank accounts I have, although I do close them as soon as I don’t foresee any future benefit.