Would you invest in mutual funds?
By dudsdoojaxi1
@dudsdoojaxi1 (166)
Philippines
May 22, 2011 7:47am CST
I been researching a lot about mutual funds and some books recommend on investing on this investment vehicle. They say that mutual fund is better than just putting your money in the bank because it beats inflation. It is also good for retirement since it uses the power of compounding. But I'm afraid of the risk that the company that will handle my fund will close and I'll be loosing my money.
2 responses
@dragon54u (31636)
• United States
22 May 11
I have been in mutual funds for years. The reasoning behind it is that when one isn't doing to well, others will be making money so you don't lose any of your principle and realize a modest to good return.
Find a financial adviser whose income depends on your portfolio doing well. The more you make, the more he makes. They typically take a small percentage of your earnings but they are very motivated to make sure you are invested in the best markets. You are young and have time to accrue retirement funds so you can afford to take more risk than someone like me in their late 50's.
Choose a company to handle the funds that has a proven track record and years in business. This doesn't necessarily mean a large company, just a stable one with good scores with any regulatory agencies you have there. Banks don't pay much interest anymore and it's really not worth your while to park your money there. Although it's a good idea to have a few thousand in a money market account that you can get to immediately if you have a financial emergency. Good luck!
@dudsdoojaxi1 (166)
• Philippines
22 May 11
how much interest do you make every year?
1 person likes this
@dragon54u (31636)
• United States
23 May 11
In my money market I make about 1.5%, next to nothing but it gives me access to an emergency fund. In the annuity I have and must stay in for 5 years I make a minimum of 3% guaranteed and can make up to 7%. So far it's been about 4.5%. In my mutual funds I don't earn interest but the shares of stocks fluctuate. There are stocks in foreign and domestic companies, small ones and large ones, ones with more risk and ones with less. I began with $50,000 in 2006 and that had increased to $66,000 in 2008. The market crash put me down just below my starting point but it has recovered and is making profits steadily. In the past two years I've increased that principle by 15%.
It's important that you realize that I'm in my late 50's and due to some poor decisions and plain stupidity and blind trust I did not begin investing in retirement funds until 5 years ago. If I had invested in mutual funds at your age and also faithfully contributed to a 401K or other retirement account I would not have to worry about outliving my money. Whatever you do, please begin investing now and don't stop and don't ever borrow from your retirement fund--pretend it is not there!
@DoctorDidi (7018)
• India
22 May 11
I always invest in mutual funds and believe that everyone should invest in these funds because these are managed by some experts in the field and the investor has nothing to do except investing the money.
@dudsdoojaxi1 (166)
• Philippines
22 May 11
how much is your average interest? Is there an instance that you get a negative return?
