| Contrary to popular belief, you do not need to be | | | | When searching for a mutual fund to invest in, |
| a millionaire in order to benefit from the improving | | | | you will want to consider a couple of key factors. |
| market conditions. In fact, in some cases it might | | | | 1. The investment style of the fund. If it is a |
| even be beneficial to have less money to invest | | | | high-risk equity fund that you are looking at, yet |
| because your options are purposely limited. | | | | you want something that is medium risk with a |
| If you are just starting out with investing and | | | | balanced approach, then you may want to |
| have under $5,000 in investible funds, you will | | | | continue your search for an appropriate fund. |
| most likely consider a mutual fund investment. A | | | | 2. The management style of the fund. Different |
| mutual fund is a pool of money that other | | | | portfolio managers have different investment |
| investors, like yourself, invest in. The fund | | | | styles. Some will actively trade the assets in their |
| manager then uses all of the resources to build a | | | | fund, others will take a buy-and-hold approach, |
| well-diversified fund of stocks (Equity fund), bonds | | | | and others might take a blend of both. As well, |
| (Bond fund), as well as other investments (e.g. | | | | you may want to investigate what types of |
| Mortgage Fund, Minerals Fund, etc.), or a | | | | companies they are investing in (e.g. Large-Cap |
| combination of investments such as stocks and | | | | versus Small-Cap, growth versus value, etc.). |
| bonds (Balanced Fund). | | | | 3. The fees of the fund. In most cases, the fees |
| Regardless of the type of fund you invest in, you | | | | will be higher for more actively managed mutual |
| will be able to rest assured that the money you | | | | funds, but this is not always the case. Find out |
| invested is professionally managed by a qualified | | | | what the fees are and determine whether the |
| and, in most cases, experienced fund manager. | | | | fund's track record (compare against the index or |
| You will not have to conduct any of the research | | | | the category of fund at Morningstar.com) to |
| yourself as the management team will have its | | | | determine whether it is worth investing in a |
| own, in-house analysts that make | | | | specific fund. |
| recommendations on specific securities or assets. | | | | Mutual funds present great long-term investment |
| All you need to do is come up with the initial | | | | opportunities for people who are just starting out. |
| deposit and, if you so choose, a monthly | | | | Not only that, but mutual funds are managed |
| contribution amount that meets or exceeds the | | | | professionally and are well diversified investments, |
| fund's minimums. (This is highly recommended as | | | | something that a lot of do-it-yourself investors fail |
| it will provide you with the benefits of dollar-cost | | | | to incorporate into their own investment |
| averaging). | | | | strategies. |