Mutual funds are a popular investment vehicle simply because they offer a number of features to suit the objectives of many types of investors.
Investment managers are responsible for buying and selling securities according to specific investment objectives, which are identified in the prospectus. Buying shares of a mutual fund can give you built-in diversification. A single mutual fund holds many different securities. When you buy into a mutual fund, investment professionals manage your money. They carefully research, select, and supervise all the assets in the mutual fund. This frees you from having to select and track individual investments. When you invest in mutual funds, you get access to some of the finest investment minds on Wall Street.
You should remember that past performance is no guarantee of future results. The value of your shares will fluctuate with the changes in market conditions, and when sold may be worth more or less than the original investment amount.
Finally, many mutual funds offer low initial investment amounts - some as low as $1,000, and in other cases, even less. Mutual fund fees also vary and can be lower than other investment alternatives. Mutual funds are offered by prospectus, which contains complete information about the objectives, risk, fees and minimum investment amounts. It should be read carefully before investing. All in all, mutual funds offer a variety of benefits. In many cases, they are ideal investment vehicles for experienced and beginning investors.
Balanced funds seek to obtain the highest return consistent with a low-risk strategy. They hold a mix of common and preferred stocks, bonds and cash reserves. The mix can vary according to current market conditions. Balanced funds usually offer higher yields than pure stock funds. Balanced funds are generally the least risky of growth-oriented mutual funds.
Growth and income funds attempt to achieve both long-term growth and current income. They invest primarily in high-yield common stock, preferred stock, and convertible debt (bonds) to generate both growth and income. Because they include a mix of investments, these funds are typically less risky than growth funds.
Transacting business with stocks can be a more complicated experience. Placing buy orders, selling shares, or dictating any number of orders can be time-consuming. To some, however, that's just part of the experience. In summary, fund investors are often attracted by the overall convenience. By way of contrast, stock investors may tend to be more comfortable with their own investing skills.
Sector funds invest in specific industries or sectors of the economy, such as communications, aerospace and defense, or health care. While they may be diversified within a particular sector, they lack broad diversification. This increases their investment risk. These funds typically seek long-term capital appreciation.
Investment managers are responsible for buying and selling securities according to specific investment objectives, which are identified in the prospectus. Buying shares of a mutual fund can give you built-in diversification. A single mutual fund holds many different securities. When you buy into a mutual fund, investment professionals manage your money. They carefully research, select, and supervise all the assets in the mutual fund. This frees you from having to select and track individual investments. When you invest in mutual funds, you get access to some of the finest investment minds on Wall Street.
You should remember that past performance is no guarantee of future results. The value of your shares will fluctuate with the changes in market conditions, and when sold may be worth more or less than the original investment amount.
Finally, many mutual funds offer low initial investment amounts - some as low as $1,000, and in other cases, even less. Mutual fund fees also vary and can be lower than other investment alternatives. Mutual funds are offered by prospectus, which contains complete information about the objectives, risk, fees and minimum investment amounts. It should be read carefully before investing. All in all, mutual funds offer a variety of benefits. In many cases, they are ideal investment vehicles for experienced and beginning investors.
Balanced funds seek to obtain the highest return consistent with a low-risk strategy. They hold a mix of common and preferred stocks, bonds and cash reserves. The mix can vary according to current market conditions. Balanced funds usually offer higher yields than pure stock funds. Balanced funds are generally the least risky of growth-oriented mutual funds.
Growth and income funds attempt to achieve both long-term growth and current income. They invest primarily in high-yield common stock, preferred stock, and convertible debt (bonds) to generate both growth and income. Because they include a mix of investments, these funds are typically less risky than growth funds.
Transacting business with stocks can be a more complicated experience. Placing buy orders, selling shares, or dictating any number of orders can be time-consuming. To some, however, that's just part of the experience. In summary, fund investors are often attracted by the overall convenience. By way of contrast, stock investors may tend to be more comfortable with their own investing skills.
Sector funds invest in specific industries or sectors of the economy, such as communications, aerospace and defense, or health care. While they may be diversified within a particular sector, they lack broad diversification. This increases their investment risk. These funds typically seek long-term capital appreciation.
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