Many are going into Canadian mutual funds these days. The concept of the mutual fund is basically the same all over the world. The fund consists of many investors. Investor money is pooled and invested by a single funds manager. Investor money is put into stocks and other similar financial securities.
Investing in mutual funds is no different from other investments as far as having a short and long term goal. The investor, who does not have a goal, or objective, will not be as successful as the one who does. Also, an investor should not be investing money he should use for the necessities.
In other words, the money that is used for investment purposes should be money that is left over after all the necessities of life are paid. The investor has to use money that he can afford to lose. This is sound advice that any seasoned investor will offer to any new to the market.
No investment is risk free, but some are less risky than others. Usually the investments that have the largest profit margins are the riskiest. The conservative investments might not be as profitable, but they are less risky. There are different types of mutual funds to invest. There is the growth mutual fund which will invest mainly in the stock of a well established company and is intended for long term capital gains.
The growth mutual fund invests money in well established companies. It is an investment that targets long term capital gains. The income mutual fund invests in debt securities. For instance the the income mutual fund would invest in government bonds. The risk is related to the credit rating of the underlying debt. This is attractive for some investors because of the higher rate of return. But some like to put money in a combination of growth and income funds in order to be more on the conservative side.
There are those who favor the no load funds. The no load fund means that all the money from the investor goes into the investment. There are no commissions fees associated with the no load fund. At the same time, a no load fund does not come with advice from a financial market expert.
People who want to be advised as to how best invest will opt for the load funds. Part of their investment goes towards broker fees and commissions, but they have access to investment advice. One of the advantages of the mutual fund is that the cost to invest is shared among a pool of investors. But this does not guarantee a profit for all investors.
But many feel that they are safer with other investors. The bottom line is that the market dictates profit and loss. An investor who has a good handle on the market will do better than the one who does not understand the market trends.
Investing in mutual funds is no different from other investments as far as having a short and long term goal. The investor, who does not have a goal, or objective, will not be as successful as the one who does. Also, an investor should not be investing money he should use for the necessities.
In other words, the money that is used for investment purposes should be money that is left over after all the necessities of life are paid. The investor has to use money that he can afford to lose. This is sound advice that any seasoned investor will offer to any new to the market.
No investment is risk free, but some are less risky than others. Usually the investments that have the largest profit margins are the riskiest. The conservative investments might not be as profitable, but they are less risky. There are different types of mutual funds to invest. There is the growth mutual fund which will invest mainly in the stock of a well established company and is intended for long term capital gains.
The growth mutual fund invests money in well established companies. It is an investment that targets long term capital gains. The income mutual fund invests in debt securities. For instance the the income mutual fund would invest in government bonds. The risk is related to the credit rating of the underlying debt. This is attractive for some investors because of the higher rate of return. But some like to put money in a combination of growth and income funds in order to be more on the conservative side.
There are those who favor the no load funds. The no load fund means that all the money from the investor goes into the investment. There are no commissions fees associated with the no load fund. At the same time, a no load fund does not come with advice from a financial market expert.
People who want to be advised as to how best invest will opt for the load funds. Part of their investment goes towards broker fees and commissions, but they have access to investment advice. One of the advantages of the mutual fund is that the cost to invest is shared among a pool of investors. But this does not guarantee a profit for all investors.
But many feel that they are safer with other investors. The bottom line is that the market dictates profit and loss. An investor who has a good handle on the market will do better than the one who does not understand the market trends.
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