| You want to get started as a mutual fund | | | | you can place them into three different risk |
| investor. What funds should you invest in? You | | | | categories: conservative, moderate, or aggressive. |
| have thousands of different mutual funds to | | | | I suggest you go with a balanced fund labeled as |
| choose from. I suggest you first open an account | | | | moderate in the fund literature you get from the |
| with a major no-load mutual fund company like | | | | fund company. |
| Vanguard, Fidelity or T. Rowe Price. Then pick | | | | Traditional balanced funds have been around for |
| these two funds to invest in, investing an equal | | | | many years and have a moderate asset allocation |
| amount in each. | | | | of about 60% stocks and 40% bonds. This ratio |
| Remember, you are just getting your feet wet | | | | of stocks to bonds remains fairly constant. These |
| and don't want to start with a bad experience. | | | | traditional funds are generally simply called |
| So, here are what I suggest are your best mutual | | | | "balanced funds", and are a good solid place to |
| funds to get started with. Your overall risk will be | | | | invest for the new investor. |
| low to moderate. | | | | If you want to get more conservative or |
| Your first pick is a no-brainer, a money market | | | | aggressive, I suggest lifecycle funds. For example, |
| fund. These are the safest of all mutual funds and | | | | an aggressive-growth lifecycle fund would be the |
| their value or price does not fluctuate. In this | | | | riskiest and would be heavily invested in stocks |
| investment you simply earn interest in the form | | | | vs. bonds. Dividends would be low to insignificant. |
| of dividends. The amount of interest you earn | | | | On the other hand, a conservative lifecycle fund |
| varies, based on interest rates in the economy. | | | | emphasizes bonds vs. stocks, and hence is safer |
| There should be zero cost to invest in a money | | | | and pays higher dividends. |
| market fund, no commissions or sales charges | | | | For most new investors I suggest a traditional |
| called LOADS. Once you have money invested | | | | balanced fund, or a lifecycle fund labeled as either |
| here, you can move it at will to other funds | | | | moderate-growth or conservative-growth. |
| offered by the fund company (also called a fund | | | | With half of your money in a money market fund |
| family). | | | | and half in a balanced fund you won't get rich |
| Keeping things simple, your other best "starter | | | | quick, but you won't lose your shirt when things |
| fund" is called a BALANCED FUND. These funds | | | | get ugly in the economy either. |
| invest in both stocks and bonds, so risk is | | | | Once you learn how to invest and gain in |
| generally moderate. These days there are several | | | | confidence, you can expand your horizons. All |
| variations of balanced funds, giving the investor | | | | three of the fund families mentioned offer a wide |
| plenty of latitude. There are traditional balanced | | | | array of investment choices. Plus, all three offer |
| funds, asset allocation funds, lifecycle funds and | | | | funds with no commissions, no sales charges ... |
| target retirement funds. | | | | NO-LOAD. Learn how to invest at your own pace. |
| All balanced funds have a diversified portfolio of | | | | Until you feel up to speed, just relax and stick |
| stocks and bonds, but they vary in terms of | | | | with your starter funds. |
| safety, dividends, and growth potential. Basically | | | | |