| This down-to-earth investment guide is geared to | | | | to investors in the form of dividends. Most |
| investing for beginners. In this investment guide | | | | investors simply choose to have their dividends |
| you will learn to invest with your eyes open, plus: | | | | automatically reinvested to buy additional shares in |
| what mutual funds are, what kinds are available, | | | | the fund in order to make their investment grow |
| and how to save cash when you invest money. | | | | faster. What makes investing for beginners a |
| Investing for beginners is like learning how to | | | | challenge is that each general fund category has a |
| swim. Not recommended: jumping in over your | | | | number of varieties. |
| head in choppy waters off the coast of Maine in | | | | Now here's your basic investment guide to saving |
| January to learn the butterfly stroke. Suggestion: | | | | money when you start investing. There are two |
| learn to float first, getting your face wet under | | | | primary costs when you invest money in funds: |
| calm clear water. | | | | sales charges called LOADS, and yearly expenses. |
| Don't try to learn to invest by speculating in the | | | | You pay a sales charge when you buy funds |
| stock market or in the bond pits, either. Start | | | | through a representative. For example, you write |
| investing in mutual funds where professionals pick | | | | a check out for $10,000 and hand it to your |
| the stocks and bonds for you. These funds are | | | | financial planner who works on commission. Then, |
| designed for the investing public. In my opinion, at | | | | 5% comes off the top to pay for sales charges; |
| least 95% of the investing public is best off | | | | and each year you are invested, expenses are |
| investing here. Mutual funds simply pool money | | | | automatically deducted from your investment. |
| from investors and manage a portfolio of | | | | These yearly expenses can be 2% or more of |
| securities like stocks and bonds for the investors. | | | | the value of your investment. |
| You simply invest money in a lump sum, like | | | | Or you can buy NO-LOAD funds directly from |
| $5000; or periodically, like $200 per month. The | | | | some of the biggest and best fund companies in |
| money you invest buys you shares in a fund. | | | | America and pay NO sales charges, with less than |
| The vast majority of funds fall into one of four | | | | 1% a year deducted for management and other |
| categories based on what they invest in: stocks | | | | expenses. To cut costs even more go with index |
| (also called equities), bonds, money market | | | | funds of either the stock or bond variety. Index |
| investments, and a combination of all of the | | | | funds simply track an index of securities, rather |
| above. For example, if you invest money in an | | | | than trying to outperform the stock or bond |
| equity fund, just about all of it will likely be | | | | market. Expenses are low because management |
| invested in stocks. | | | | costs are low; sometimes costing you less than |
| Equity funds are the riskiest and have the | | | | ¼% a year. Plus, index funds have another |
| greatest profit potential, with growth and perhaps | | | | advantage. You won't beat the markets, but you |
| some income as their primary objective. Bond | | | | shouldn't under perform them either. |
| funds invest in bonds to earn higher income for | | | | Investing for beginners need not be a game of |
| investors at a moderate level of risk, generally. | | | | sink or swim. Call a no-load fund company that |
| Money market funds are the safest and pay | | | | deals directly with the public and ask for a free |
| interest rates that vary with interest rates in the | | | | investor starter kit. Then start investing when |
| economy. Balanced funds are the fourth category | | | | you feel comfortable, and save cash when you |
| and invest in a balance of the other three major | | | | invest money. If you have a limited financial |
| investment asset classes; and this makes them a | | | | background I suggest you find and read a |
| great place to start investing. | | | | complete investment guide before you invest. |
| Income or interest earned in a mutual fund is paid | | | | |