| The best investment fund that any investor can | | | | the proper proportion. |
| invest money in is not a hedge fund. This best | | | | If you invest money in one of the these |
| investment rarely if ever underperforms the | | | | S&P 500 index funds and the stock market |
| stock market or bond market, is highly regulated | | | | as measured by this index returns 15% for the |
| to protect investors, and charges low fees and | | | | year ... you should earn about 15% as well. You |
| expenses. Sound interesting? | | | | will actually earn a bit less due to charges, fees |
| A hedge fund is not designed for average | | | | and expenses. |
| investors. In fact, unless you meet certain | | | | The good news is that some index funds cost |
| qualifications you can not legally invest money in | | | | nothing to buy and they are low-cost to own. |
| this type of investment fund. For one thing, you | | | | First, because they are not actively managed the |
| need to be rich by the average person's | | | | management expenses are relatively low. They |
| standards. A hedge fund can be very risky and | | | | don't pay a staff of analysts and managers to |
| quite expensive to own. Plus, hedge funds are not | | | | pick stocks and/or bonds to invest in. They |
| highly regulated by the government. | | | | simply invest money and maintain an investment |
| The best investment fund for average investors | | | | portfolio that duplicates the holdings in an index. |
| can take the form of a stock fund or bond fund. | | | | Second, some mutual funds levy sales charges |
| We're talking about a specific kind of mutual fund | | | | when you invest money and others do not. Sales |
| here, and these investment funds (mutual funds) | | | | charges are called "loads". No-load funds do not hit |
| are heavily regulated to protect the investing | | | | you with sales charges. |
| public. Mutual funds are actually investment funds | | | | The best investment fund for my money is a |
| that are designed for average investors. | | | | no-load index fund, whether it tracks a stock |
| Specifically, we're talking about INDEX FUNDS of | | | | index or a bond index. If I invest money in a |
| the no-load variety. What's so great about them? | | | | stock index fund and the index returns 15% for |
| First, index funds virtually never underperform | | | | the year, I'm willing to give up ½% or so |
| their benchmark. They are not actively managed | | | | for expenses. |
| in an attempt to outperform other stock funds or | | | | On the other hand, you can pay 5% off the top |
| bond funds. Instead they are passively managed | | | | in sales charges and 2% a year to invest in an |
| to track a stock or bond index. For example, an | | | | actively managed stock fund and hope they beat |
| S&P 500 index fund simply buys and holds | | | | their benchmark. I wouldn't bet on it, since most |
| the 500 stocks in that benchmark stock index in | | | | of them don't. |