Heike Moeller February 23, 2020 Mutual Fund
Keep It Simple In the final analysis, the most important thing you need to analyze when it comes to picking mutual funds is your needs. Look at your overall investment objectives and then make your investments accordingly. This will typically mean deciding what risk levels your comfortable with and then executing. Given historical results, for most of us that may very well mean buying index funds and dealing with matching the markets. No one has drawn up a superior playbook and 11% is not so bad anyway.
Many investors try to play the game of picking individual stocks rather than picking solid mutual funds and then often wonder why they experience both difficulty and stress making money in the stock market. I tell investors that they should not be afraid to own individual stocks if they are willing to take the time to learn enough about the individual company or stock to make a rational businessman`s decision. And do not forget about valuation.
Investing in stocks, mutual funds and exchange traded funds can be a great way to build wealth, but timing the markets can be detrimental to your bottom line and extremely hard to do. While there are many services out there that claim to accurately pick the highs and lows, the reality is that very few individual investors can accurately use market timing effectively.
Stay Out of the Money Market Fund or Stable Value Funds - such funds are great if you are building an emergency cash reserve or saving for your summer vacation, but if your investment time horizon is long, putting your money in such vehicles is a poor decision. When the price is below the average you use, be in the Money Market, or stable value option that does not lose money! Move your investments to the stable option as soon as the indexes and funds move below the average you use.
No one offers the idea of buying investment properties which appreciate and allow you to harvest dollars out of them by way of refinance and adjust the rents to cover your cash harvest. Once you harvest it is time to deploy and like the seasons, you can do the same cycle over and over again increasing your wealth.
One way around the round-trip trap is instead of buying the same fund back (because now that energy fund is going up again) is to buy a similar fund from a different mutual fund family; in other words switch from ABC fund company to XYZ, as an example.