| With fewer and fewer employers offering | | | | doing as many times a day as you wish. This is |
| pensions and other retirement savings options, | | | | not the case with mutual funds, which are only |
| more and more American workers are turning to | | | | required to calculate their NAV once every 24 |
| Mutual Funds to save for the future. | | | | hours. |
| What is a mutual fund? It is a company that pools | | | | There are three main types of mutual fund |
| money from many investors and invests it in a | | | | categories - money market funds, bond or fixed |
| variety of options including stocks, bonds, | | | | income funds, and stock (equity) funds. Each |
| short-term money markets and other securities. | | | | offers its own risks and rewards. |
| The fund's portfolio (or listing of its investment | | | | Money Markets |
| funds), shows how diversified its investments are. | | | | Relatively low-risk, money market funds are, by |
| These funds are handled by a professional money | | | | law, only allowed to invest in high-quality |
| manager as one account. Individual investors have | | | | short-term investments issued by the U.S. |
| little (if any) say as to the types of assets | | | | government. Inflation can be a concern, however, |
| purchased for the fund's portfolio. | | | | since rising inflation rates can quickly erode money |
| Letting someone else handle all trades can be | | | | market investment returns. |
| difficult for many seasoned investors to handle, | | | | Bond Funds |
| but most uneducated investors love the idea of | | | | Bond funds generally produce higher yields, thus |
| giving a team of professionals sole buying power. | | | | contain more risk. |
| The advantage of being involved in a large-scale | | | | Stock Funds |
| mutual fund is the ability to diversify their holdings | | | | The best option for long-term investing, stock |
| - a safer investment for all. | | | | funds are extremely volatile on short term basis |
| There are some disadvantages though to this | | | | with drastic ups and downs depending on market |
| type of account. They include: | | | | trends. |
| ·Cost. Investors are required to pay sales | | | | Mutual funds are a growing investment strategy |
| charges, annual fees and other expenses on | | | | for many small scale investors saving for their |
| mutual funds regardless of how well (or poorly) | | | | retirement. The key is to find a fund that offers |
| the fund performs. | | | | a diversified portfolio that offers a comfortable |
| ·Price Uncertainty. When you purchase an | | | | risk level for your investment style. |
| individual stock you can check to see how well it's | | | | |