| Many investors try to play the game of picking | | | | carry a high load, or sales charge associated with |
| individual stocks rather than picking solid mutual | | | | them. If you pay a big commission, you simply |
| funds and then often wonder why they | | | | have less dollars in the investment to work with. |
| experience both difficulty and stress making | | | | Studies show that for most mutual funds, the |
| money in the stock market. I tell investors that | | | | commission or load simply is not worth it. Don't let |
| they should not be afraid to own individual stocks | | | | a good or even a great salesman talk you into a |
| if they are willing to take the time to learn enough | | | | load fund, unless you have checked for yourself, |
| about the individual company or stock to make a | | | | that the returns over several different periods of |
| rational businessman's decision. And don't forget | | | | time have been outstanding. |
| about valuation. | | | | Make sure the management team hasn't changed |
| Sometimes it is just a lot easier to pick fabulous | | | | by the way. You don't want to pay for fabulous |
| mutual funds, and let professional money | | | | past results only to find out there is a new |
| managers make the individual stock selections for | | | | portfolio manager in town running your mutual |
| you. If you go this route, and for many it is the | | | | fund. Watch out for the fad funds by the way. |
| way to go, than I suggest your big decisions are | | | | By the time an entire mutual fund sector is hot, |
| what sectors you want to invest in, and what are | | | | and ripping up the charts with performance, it is |
| your asset allocations. Sounds like fancy language, | | | | too late 90% of the time, for you to be an |
| but really it is not. It's just plain common sense | | | | investor. You don't want start becoming an |
| investing. What is your aversion to risk? Do you | | | | investor in gold as it passes $1200 per ounce. |
| want to embrace investment risk, or do you | | | | That is the time you want to be thinking about |
| seek to encounter as little risk as possible. | | | | exiting, not entering. |
| The recent explosion of an oil rig in the Gulf and | | | | Do a little homework, have reasonable |
| the resulting chaos and environmental damage | | | | expectations, pay a low load, or even used index |
| tells you that any company can all of a sudden be | | | | funds, have a long term outlook, and you should |
| exposed to dramatic unforeseen risk. In this case | | | | be okay. More than that, you should be pleased |
| it was BP. Mutual Funds can also possess much | | | | with the wealth creation process that you have |
| more risk than you thought you were | | | | put together for yourself. If you insist on taking all |
| encountering. | | | | kinds of risk, than you should do it with only |
| Here's what I think you should consider doing. First | | | | about 5% of your investable assets. Good luck. |
| unless you are a real expert, consider buying | | | | Find Additional important articles on my blog. |
| Index Funds, as opposed to investing in funds that | | | | |