10 reasons to invest in mutual funds
Everyone who follows
the financial news has heard of mutual funds and knows
the stock market has generally risen
(with various ups-and-downs)
for over 200
fact, by most measures, the stock market has made more
money for more people, and done it more reliably, than
any other investment over the past 100
you want to accumulate substantial wealth, you must
include stocks in your investments!
most people who “invest” don’t study the market.
They don’t understand it, and they don’t have
time to manage their portfolio wisely.
That’s where mutual funds come in.
I respect that other people have other opinions,
and certainly not all mutual funds are well managed
– you MUST choose wisely and use appropriate caution!
But, for most folks, a good, solid, boring mutual
fund is the golden path to riches.
are my Top 10 reasons to us mutual funds:
You can select from thousands of funds (you’ll
find one to suit your needs) and you can get information
on them easily.
Magazines like “Money” are easy to find. Most credit unions have information, and your local library
is a goldmine – and there’s the Internet.
Can Start Small.
Most mutual funds will let you start with less
than $1000, and if you set it up for automatic deposits,
some will let you start with only $50.
I’ve spent more than that in a restaurant!
There is NO reason not to consider this!
You deposit 10% of your income every month.
Just pay yourself first, then pay the mortgage,
then pay everyone else.
I don’t always have time to research, select,
and monitor individual stocks.
So, I pay a professional a small fee to do it
for me. A
good fund manager will make you rich!
Depending on what index you pick, the U.S. stock
market has gone up an average of over 12% per year for
the past 10 years, and it’s been almost that high for
the past 20 years.
The market fluxuates, but the beauty of this
is, you don’t care! Over 10, 20, or 30 years, the system works every time!
The details are complicated, but by investing
every single month, whether the market is up or down,
you get a tremendous boost from the mathematics.
Your “average cost” will always be less than
the “average price” you paid! And that is money in your pocket!
A broad-based growth fund typically invests in
dozens of companies in different industries, sometimes
even in different countries around the world.
If one stock goes down, hopefully dozens of others
will go up. There
is excellent protection and sound risk management built-in
to these funds.
If you prefer, and if you do the research, there
are funds that invest in only a very small number of
If you can accept the additional risk, you can
invest in one particular industry, or one country, or
in companies of a certain size or that are environmentally
specialization offers the potential for even greater
profits, but it can also bring greater potential risk.
Study before you invest!
Most mutual funds are offered by management companies
that sponsor several different funds, with different
make it easy to move your money between funds, so as
your goals change, you can adjust your investements
with a quick phone call, or on the Internet.
Once you get started, your enthusiam builds.
Once you have money “in the market”, you’ll track
it, manage it, and in all probability, your desire to
save will increase. If you’ve had difficulty saving in the past…START!
Those monthly statements will be positive reminders
to do even more.
you should invest in tax-sheltered retirement plans first,
and yes, there are other investment possibilities.
And yes, there is some risk, because the market
can go down. But
to retire wealthy, pick a great, long-term growth fund,
invest regularly, and let the system work for you!
The key, as always is:
Heres to your success
2003 by Philip E. Humbert.
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