| Mutual funds are the home of investing for | | | | diversified portfolio of bonds. Your total cost of |
| beginners. Even so, investing in funds still scares | | | | investing can be less than ½% a year of the |
| many beginners and justifiably so, with the | | | | value of your investment. |
| thousands of funds available today. Here we cut | | | | The best stock fund to start investing with would |
| to the chase and specify the best bond fund and | | | | be a no-load index fund as well, to avoid sales |
| best stock fund for investing for beginners. | | | | charges of about 5% off the top and/or 2% or |
| If you are new to the game, start investing small | | | | more in yearly expenses. It would be a |
| by putting money into just two different mutual | | | | HIGH-QUALITY, LARGE-CAP, EQUITY INCOME |
| funds: a bond fund and a stock fund. After all, | | | | fund. In such a fund you steer clear of riskier |
| stocks and bonds are the cornerstone of any | | | | high-growth or small company stocks, both of |
| investor portfolio, and mutual funds are the best | | | | which can be highly volatile; and pay next to |
| way of investing for beginners. Now, I'll tell you | | | | nothing in dividend income. The very best stock |
| what to look for in both categories to keep risk | | | | fund I know of to get you situated in the major |
| moderate and get your feet wet at the same | | | | stocks in the U.S. market: an S&P 500 STOCK |
| time. Remember, our goal here is to keep it | | | | INDEX fund. With this fund you own a very small |
| simple, not to discuss every type of bond fund | | | | part of a large portfolio consisting of the 500 |
| and stock fund available. | | | | most valuable stocks in America. |
| The best bond fund to start investing with is a | | | | Included in the above stock fund are the blue-chip |
| HIGH-QUALITY, INTERMEDIATE-TERM bond fund. | | | | company names we are all familiar with from |
| If an INDEX variety is available that is no-load (has | | | | Alcoa and American Express, GE, Microsoft, |
| no sales charges) go for it. The bond fund I just | | | | McDonalds... to the world's largest retailer. |
| described will be of moderate risk and pay a | | | | Investors here can expect to profit from higher |
| dividend yield that is middle-of-the-road. By | | | | stock prices in a rising market; plus earn dividends |
| eliminating long-term and low quality (high yield or | | | | of about 2% a year or so. |
| junk) funds that pay the highest dividends, we've | | | | If you put the same dollar amount into our best |
| also taken the highest risk bond funds out of | | | | bond fund and best stock fund above you will |
| consideration. At the same time, we have | | | | further moderate your risk and have a very |
| eliminated short-term funds that pay considerably | | | | simple, yet basically balanced investment portfolio. |
| less income in the form of dividends. | | | | Over the years, the big investment houses have |
| By going with an index fund that is no-load, you | | | | traditionally suggested that their clients put 60% |
| keep the cost of investing at a minimum. Ideally | | | | of their money in stocks and most of the rest in |
| then, the best bond fund for investing for | | | | bonds. What could be easier investing for |
| beginners is a: no-load, high-quality, | | | | beginners than going with two low-cost mutual |
| intermediate-term, bond index fund. With such a | | | | funds of the index variety? |
| fund you own a very small part of a large | | | | |