Lux Investing
What mutual funds should I invest in?
I am at the moment investing $3000 so since that isn't much I want to go into a mutual fund. Should I invest in small or large cap funds? It seems like short cap perform the best but I am not sure. Please put suggestions of good market funds. Thank you Oh then I am 13 and am going long term investing.
Public Comments
- In order to talk about investments of any kind, we need to know your age and what your longer term goals are with respect to your retirement, buying a house, having kids that might go to college, etc. Generally, if you are young, you can invest in cap funds - large or small. The younger you are the greater risk you can absorb over time so you can also invest in higher risk funds like sector funds. Remember that the key to success is to leave them alone, don't keep swapping every time Wall Street has a hissy, and diversify - have stock, bond and money market funds as part of your overall portfolio.
- None, My friend I beg you not to invest in mutual fund. It is designed to take your money. Any smart investor can tell you that mutual fund is A joke. I had A friend who invested 5,000 and 3 year later found out she only had less than 2,000 left from the stock. You should invest in large capital funds, but becareful!!! Goodluck
- "A mutual fund is nothing more than a collection of stocks and/or bonds. You can think of a mutual fund as a company that brings together a group of people and invests their money in stocks, bonds, and other securities. Each investor owns shares, which represent a portion of the holdings of the fund. You can make money from a mutual fund in three ways: 1) Income is earned from dividends on stocks and interest on bonds. A fund pays out nearly all of the income it receives over the year to fund owners in the form of a distribution. 2) If the fund sells securities that have increased in price, the fund has a capital gain. Most funds also pass on these gains to investors in a distribution. 3) If fund holdings increase in price but are not sold by the fund manager, the fund's shares increase in price. You can then sell your mutual fund shares for a profit. " By definition mutual funds are great idea for small investors but in theory they have not proved to be of much use. They are excellent idea only in theory!!! I would suggest you talk to an expert in this field as he can give you best answer based on knowledge of specific fund that you intend to invest in!
- Small caps are more volatile than large caps. Consider a large cap "world stock" fund. That gives you exposure to both domestic and foreign stocks in one package. T. Rowe Price's Global Stock Fund is an excellent one.
- Since you are only 13 and looking long term, any fund that tracks the performance of the S&P 500 index is good.
