On 2008-01-15 12:28:52 -0800, "Ed" <EdVanords[at]cox.net> said:

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If I understand your intention, you are seeking some of the advantages
of a mutual fund without some of the disadvantages, expenses, etc. Here
is an approach I have taken with good results: Invest in a selection of
dividend reinvestment plans (DRIPs) in blue chip companies that pay
regular, substantial dividends. Doing this avoids sales charges and
management fees and insures regular reinvestment of dividends without
cost. I have had good results with as few as 8 individual stocks. More
are possible if you insist on diversification, but with good blue chip
companies you probably get sufficient diversification with fewer stocks
than one might suspect. I paid special attention to companies with a
history of gradually rising dividends. In effect you have your own
little private "mutual fund" with an excellent chance of growth over
the years minus the drain caused by sales charges and management fees.

In article <_n7jj.3577$HL1.2750[at]newsfe21.lga> , "Ed" <EdVanords[at]cox.netwrote:

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Most of the magic here is terminology. If you substitute the word
"account" for "fund", you are 95% of the way there. The big fund
houses call them "mutual funds". Your broker calls what you have
your "account". Each is a basket of securities.

The only difference with a mutual fund is that they take the account,
chop it up into a zillion small pieces, and then buy/sell/trade those
small pieces like it was a stock.

In your case, you could think of it like this--take your account,
incorporate it as a business, then sell shares in your corporation.
Since all the corporation owns is stock and cash, each share of the
corporation corresponds to a fraction of the stock and cash.

That gets you 99% of the way there.

The other 99% is dealing with the Securities and Exchange Commission,
lawyers, getting brokerage licenses, having access to the markets
at the wholesale level, and back end services to keep track of
everything and service the customers.

A hedge fund is a simplified version of a mutual fund. That is
all the rage today. I'd suggest doing some research on this
topic to learn more about the business.

When you boil this all away, there is one simple question that
has to be asked. If I want to be wealthy, and you are not already
rich, why would I want to take any of my money and give it to you
to manage? If you had a great track record and made a fortune,
then that would be a different story. But as a newbie in the
market, wouldn't I have a better statistical chance at earning my
fortune by giving my money to a chimpanzee to manage?

-john-

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On Jan 15, 12:28*pm, "Ed" <EdVano...[at]cox.net> wrote:
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They go out, buy a bunch of stocks, and market it to people as a fund.

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Why do you need to write software to do this? Why do you need to make
it into a single fund? Are you trying to market this?


- quote -

Can anyone explain how these Stock Fund Companies (like Vanguard and
Fidelity) create a fund from a group of stocks?

I have a group of stocks extending over several years and I thought I would
like to make them into a single Fund (maybe called "Ed's Fund"). I hoped to
write software to do this.

Can anyone point me in a direction to accomplish this?

Thanks.

Ed