IF YOU are the average person, you may have a 401(k) with your company, and you might even have an Individual Retirement Account with a bank or other financial institution. But did you know there is another option out there to help you invest? Many people are taking the opportunity to invest in mutual funds to help them reach their financial goals.
What is a mutual fund?
A mutual fund is a way to invest through a regulated investment company. Investors’ money is placed in a pool and it can be diversified into a variety of investments such as stocks, bonds or money market securities.
Mutual funds allow you to invest in a variety of alternatives; there is usually less risk involved in a mutual fund than if you were to buy an individual stock.
The rate of return can vary, so it is important to have your goals in mind.
Are you saving for retirement, your children’s college education or to buy a new house? The market will fluctuate, but in the long run mutual funds have the potential to provide a greater return than interest from a regular savings account.
But, it is also important to remember that unlike a savings account, mutual funds are not insured or guaranteed and can lose value.
What are the benefits of a mutual fund?
There are many benefits of mutual funds. For instance, you can start investing with a small amount of money. Also, you get the advantage of professional management and an easy way to diversify your investments; they are easily accessible and may be redeemed on any business day.
There are a variety of mutual funds in the marketplace and it is important that you choose one that fits your needs. For more information about mutual funds, contact a financial services professional.
There is no assurance that mutual funds will achieve their investment objectives. Investment return and principal value will fluctuate and any funds’ shares, when redeemed, may be worth more or less than their original cost.
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If you suspect a scam, call the NICB hotline at 1–800–TEL–NICB.
For information about auto insurance and insurance fraud, contact your insurance agent.
( Published on July 25, 2009 in Asian Journal Los Angeles p. C5 )
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