subject: Should I Purchase Mutual Funds? [print this page] This is a great question. In order to answer it, you must understand what mutual funds are and the pros and cons to owning them.
Pros:
* If you are not a savvy investor and don't have time or resources
to give learning the ins and outs of mutual funds, then this may be
the way for you to invest.
* Mutual fund managers and analysts wake up each day to do what
they know best, investing in equities (stocks and bonds). Keep in
mind that the mutual fund managers earn their (big bucks) income
from the performance of the fund.
* A mutual fund comes in a variety of types and styles of investing.
For example, there are stock funds, bond funds, sector funds,
money market funds, moral issue funds, target dated funds,
balance funds and asset allocation funds.
* Mutual funds can be in a IRA.
* Should I purchase mutual funds
in my retirement? You can get started with a low investment, such as only $1,000. You can systematically invest and have gains automatically reinvested.
* Mutual funds are liquid in that, it only takes 1-3 days to receive
your money.
* Mutual funds pool monies from many individual investors which
is an advantage in resources for the fund managers for purchasing
power.
Cons:
*
Mutual fund managers buy and sell what's in the funds. If the
fund (hopefully) makes money, you may receive capital gains
distribution which can be reinvested. You will be taxed on this.
* Past performance is not indicative of future performance.
* Mutual funds do have sales charges, fees and expenses
* Mutual funds are not guaranteed or insured by FDIC.
* Mutual funds are sold at end of day (usually 4 p.m.) regardless
of the time of day you place the sell order.
There is a lot of information to know about. There are A,B and C shares.
There are load and no load funds. There are break points.
As always, asking, should I purchase rel="nofollow" onclick="javascript:_gaq.push(['_trackPageview', '/outgoing/article_exit_link']);" href="http://retirementusa.com/financial/investments/bonds"> mutual funds, you should consult a Financial Advisor who is qualified. Be sure to see and ask for their credentials.
Should I Purchase Mutual Funds?
By: ric dalberri
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