This guide for the various types of investment funds. A mutual fund is a professionally managed type of collective investment scheme that pools money from many investors and invests it in stocks, bonds, short-term money market instruments, and/or other securities.
When it comes to investing in mutual funds, investors have literally thousands of variations. Before investing in the fund on the feasibility of investment strategy and risk funds good opportunity for you.
The first step for the success of the investment is to determine your financial goals and risk tolerance - whether in its own discretion or professional help financially. Once you know what you do if you need money, and how much risk you can tolerate, you can choose.
Most mutual funds fall into one of the three main categories - money market funds, pension funds (also known as the "Fixed Income" fund), and stock funds (also called the "L" Equity Fund). Each type has its own characteristics and different risks and opportunities. Typically, higher yield potential, higher risk of loss.
Money Market Fund:
Money Market Fund, have relatively little risk compared with other investment funds. Investor losses have been rare, but they are possible. Money Market Fund to pay dividends, which generally reflect the short-term interest rates, historically funds and money market yields are lower than in bonds and securities funds.
Bond Fund:
Bond funds are generally more risk than money market funds, mainly because they tend to achieve higher yields. Because there are many different types of bonds, bond funds can be very different in their risks and benefits.
Stock Fund:
A stock fund is a fund that invests in Equities more commonly known as stocks. The objective of an equity fund is long-term growth through capital appreciation, although dividends and interest are also sources of revenue. Specific equity funds may focus on a certain sector of the market or may be geared toward a certain level of risk.
A small information for the new investors if they have a certain objective, they can invest accordingly---
| Investors interested in: | Should invest in: |
| Growth | Stock Funds |
| Income | Bond Funds |
| Safety of Principal | Government Bond Funds |
| Immediate Liquidity | Money Market Funds |
| Tax Relief | Municipal Funds |
| Maximizing Current Income | Corporate Bond Funds |
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1 comment:
Nice Info :)
It is widely perceived that MFs are he best to invest into. And the returns they offer are also pretty consistent.
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