| When it comes to mutual funds there are types | | | | but you'll never lose your investment. |
| that fit most budgets and investments styles. In | | | | Bond funds are used to provide current income |
| North American alone there are in excess of | | | | on a regular basis. These funds usually invest in |
| 10,000 mutual funds, so there are more mutual | | | | government or corporate debt. While they will |
| funds than there are stocks. That is a very big | | | | appreciate in value, they will do so at a slow rate, |
| selection to choose from and finding the right | | | | but will provide a steady cash flow. Bond funds |
| fund for you can be a major task. | | | | are used mostly by very conservative investors |
| The very first thing that any new investor need | | | | and retirees. While they pay higher than Money |
| to consider is that, while there are a seemingly | | | | market they do have a higher risk factor. |
| endless selection of funds to choose from, there | | | | Corporations go broke all the time and even |
| are three general types and each type has | | | | governments are not immune. Witness the |
| different risks and rewards. A basic understanding | | | | current economic troubles in California for an |
| of investing will tell you that the higher the value | | | | excellent example |
| of the return, the higher the risk. such thing as a | | | | Equity funds represent the largest group of |
| If you want to make more money faster you | | | | mutual funds. Equity funds focus on long term |
| must take on increased risk, and while some | | | | capital growth with some income. There are |
| funds are more speculative (and riskier) than | | | | many different types of equity funds because |
| others, all mutual funds come with some risk. | | | | there are many different types of equities. |
| All mutual funds are composed of various | | | | The best way to design your own "Best Mutual |
| investors who have similar financial goals. Basically | | | | Funds" is to first classify each fund based on both |
| there are 3 types of funds: Equity funds which | | | | size of the company and the investment style of |
| are stocks; fixed-income funds, which are bonds; | | | | the funds manager. Check the P/E, price-to-book |
| and Money Market funds. Every mutual fund is | | | | ratios and high dividend yields. Compare your |
| some sort of variant of these three general | | | | findings with your particular financial goals and go |
| types. | | | | with the closest match. |
| Money Market Funds are generally the safest and | | | | Investing in any mutual fund is a tricky thing to |
| consist of short term debt instruments like T-Bills. | | | | do. Keeping your own financials goals clear in your |
| Your returns will not be spectacular, usually about | | | | mind when you do your comparisons will help you |
| twice what you will get with a savings account, | | | | along this perilous road to financial success. |