Market Analysis for Private Investors

Essay by masroorahmed August 2010

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Market Analysis for Private Investors


Market Analysis for Private Investors


OEIC is the fund or a company located in UK and it invests in other companies adjusting on constant basis according to the criteria and the size of the fund. The shares of the company are largely based on the assets underlined the fund assets. There are no quotes for ask and bid on the shares of OEIC. The buyers receive from the same price as it was bought by the seller earlier.


John is a small investor with £200 a month to put into OEICS based investment in a stocks and shares ISA. He has a long term view of investment and is prepared to take risk in the early years if it is going to make really high level gains more likely. He has been looking at performance tables and despite the general downwards trend in recent performance in all markets, has also seen some massive growth over one year periods in a number of overseas market focussed funds and thinks this is probably where he needs to be investing.

However he has just read an article which has cast some doubts in his mind. The main statement which caught his attention said 'Past performance figures represent a 'honey trap' with no guarantee of continuation in future time periods'. John is now confused and wonders how else he can choose his funds successfully.

OEIC stands for open-ended investment company. An OEIC has a company structure; this means that when one invest one will hold shares in it. Many OEICs have a single price at which shares in the fund are both bought and sold. However some OEICs are dual priced, which means they have different buying and selling prices. The fund can get larger...