| When it comes down to it, there are thousands | | | | up, and prepayment risks because the bond issuer |
| of choices when it comes to investing in mutual | | | | may decide to pay off debt to issue new bonds |
| funds. The only way you're going to know which | | | | when the interest rate falls. |
| fund is the best for you is by assessing the | | | | 3. Global equity growth funds - The value of |
| investment strategy of that fund and looking at | | | | these mutual funds can rise and fall very quickly |
| the risks that are associated with it. This is | | | | over a short period of time. However, they do |
| important to do so that you can find the mutual | | | | tend to perform better over the long-term, |
| fund that is the right fit for you. If not, it is like | | | | making this a fund that a lot of long-term |
| putting your shoes on the wrong feet. You're not | | | | investors embark upon. These tend to be the |
| going to be able to stand on your feet for too | | | | riskiest of the funds, but funds tend to have |
| long. Finding the right fit means that you can stay | | | | higher returns when they are extremely risky. It |
| in the game and actually benefit from it financially. | | | | just depends on what type of risk you want to |
| But since there are thousands of choices, we're | | | | take. |
| just going to discuss the main categories that | | | | 4. Balanced funds - These funds consist of |
| mutual funds fall into. Those funds are: | | | | different types of investments such as bonds, |
| 1. Money market funds - These are funds that | | | | common and preferred stocks, and short-term |
| have a lower risk compared to many of the | | | | bonds. This avoids too much risk and gives the |
| other funds out there. It is mandated by law that | | | | investor the opportunity to receive income and |
| money market funds are only able to invest in | | | | capital appreciation. These types of mutual funds |
| short-term investments that are of a high quality. | | | | give the investor the opportunity for both growth |
| These investments can only be made in U.S. | | | | and income. These investments tend to manage |
| companies and the different levels of government. | | | | the downturn of the stock market better. That |
| The good news is that investor losses are quite | | | | means there is not as much loss associated with |
| rare, but they have happened. This is more or | | | | these funds. |
| less the type of fund utilized by those who do | | | | So now you know the different types of funds |
| not like risk. | | | | available at The LOM Group Now it is just a |
| 2. Bond funds, or fixed income funds - These | | | | matter of sifting through the thousands of funds |
| mutual funds have a higher risk than money | | | | within them that can yield great profits or large |
| market funds. The reason why the risk is higher | | | | growth. It depends on what type of risk you are |
| is because these are the funds that tend to seek | | | | prepared to take with your money. Just keep in |
| out higher returns. These types of mutual funds | | | | mind that the greater the risk the higher the |
| are not restricted to a certain type of investment | | | | return tends to be. However, the greater risk can |
| like money market funds are. Most importantly, | | | | also result in money being lost. Once that money |
| their risks can vary. Such risks include: a credit | | | | is lost, it can't be recovered. So you have to ask |
| risk because certain parties may not pay the bills, | | | | yourself whether a short-term investment is best |
| interest rate risks because the value of these | | | | for you or if you are willing to go on in for the |
| bonds can go down when the interest rate goes | | | | long haul. |