Mutual funds are a good investment vehicle for newbie investors without a lot of surplus cash, so there's no reason you can't get started building your wealth today. Yes, wealth. Do you know enough about mutual funds to start investing?
Diversification mitigates your risk, so if one security declines, others might increase in value so the overall portfolio still goes up.
There's no guarantee a fund that did well last year will continue that outstanding performance this year.
When reviewing funds' relative performance, look at how it did during both bull (uptrending) and bear (downtrending) markets.
It’s true many mutual funds are invested in equity securities (stocks), but the great thing about mutual funds is that you can find funds invested in bonds, government securities, real estate and even cash.
Money managers charge a percentage fee based on the total assets of the fund. Make sure to check fees before investing.
The purchase or sale price of your unit share in the fund is determined by the value at the end of the trading day of each security held by the fund.
The terms "value fund" and "growth fund" refer to the stock selection strategy of the fund, not the price of the fund.
For you, there is no "fun" in mutual funds. You're not sure how to choose a fund, calculate its fees or evaluate its performance. But, you do have a fine singing voice. Don’t be discouraged. You'll find plenty of books and experts who can help to transform you into one savvy investor.
You're acquainted with mutual funds, but you're not friending them on Facebook quite yet. Chat with your investment counselor, or enroll in a quick seminar, and those funds and you will be doing lunch, soon.
You know mutual funds so well, experts could tap you for advice. Pick some funds that jive with your investment goals and start building that portfolio. Don't be surprised when your friends start asking you for suggestions on what to buy.