| Money is a necessary evil in our lives. While the | | | | small companies, sector, etc. It is good to be |
| current recession might have made some new | | | | diversified with investing in many companies but |
| investors gun shy about taking a position in the | | | | the downside is that there are fees associated |
| market, historical evidence says that it will | | | | with purchasing mutual funds. Moreover, a lot of |
| eventually bounce back. There will always be | | | | mutual funds are just following particular indices so |
| some degree of risks with investing but if you do | | | | in reality, those who are paid to invest in the |
| your research, you can minimize these risks. Here | | | | companies aren't really doing anything special. You |
| are some investment tips for the new investor. | | | | too can buy into these indices with index funds. |
| Before you first start to invest, make sure you | | | | As the name suggests, index funds just track a |
| have other aspects of your financial life in order. | | | | particular index. There are funds that track the |
| You should not be mired with bad consumer debt, | | | | Dow Jones, S&P 500 or even commodities |
| have an emergency fund on hand, and not need | | | | such as the NYMEX. The great thing about index |
| the investment money for the short term. If you | | | | funds is that the management expense ratio |
| do require the money within five years, you | | | | (MER) on these is low compared to the actively |
| should put the money in bonds or a savings | | | | managed mutual funds. After all, why pay |
| account - something that is low risk. | | | | management fees for people who don't do |
| For those who are thinking of investing for the | | | | anything different than following the trend of the |
| long term, you can either find a financial adviser, | | | | market? |
| or invest for yourself. A financial adviser will most | | | | If you are a new investor and are trying to get |
| likely direct you to buy mutual funds which are | | | | your feet wet in the market, take a look at index |
| investment vehicles that invest in specific types | | | | funds as an investment option. Many investment |
| of companies. The companies within that mutual | | | | gurus advise this option but do your due diligence |
| fund depend on its specialty - large companies, | | | | yourself and find out if this is right for you. |