Heike Moeller February 24, 2020 Mutual Fund
The recent explosion of an oil rig in the Gulf and the resulting chaos and environmental damage tells you that any company can all of a sudden be exposed to dramatic unforeseen risk. In this case it was BP. Mutual Funds can also possess much more risk than you thought you were encountering.
If you are unwilling to take much of a risk, you are likely to stick with investing in fixed funds which will not leave you in a position where you are likely to lose everything, but they are also unlikely to put you in a position where your savings will multiply low risk often equals low growth . Over Confidence - more than one employee told me that they are investing their money in only one or two funds. Consider Lifestyle Funds - lifestyle funds are an excellent option for investors who feel that they do not know enough to invest for themselves or that do not want to deal with the hassle.
Before you invest in a fund, look at the fees the company charges. You will notice these fees in the prospectus. If you are ambitious, you will be able to find the fee structure online. Always go with a fund that has a low expense ratio and stay away from 12b-fees. When buying mutual funds you will have various types of choose from. There are money market funds, municipal bond funds, corporate bond funds, mortgage-backed securities funds, U.S. Government bond funds, stock funds, and index funds.
Watch the indexes, and watch your funds if they have symbols. Fixed Funds Fixed Funds, sometimes called Guaranteed Funds, are known for steady, predictable growth in the long term. They carry Guaranteed Interest Contracts underwritten by insurance companies, and because of that fact are commonly considered very low risk funds. This includes the additional protection of the funds from garnishment or attachment by creditors or assigned to anyone else, except in the case of domestic relations court cases dealing with divorce decree or child support orders QDROs; i e , qualified domestic relations orders .