Investing 101 by Michele Cagan

Author:Michele Cagan
Language: eng
Format: epub
Publisher: F+W Media

Six Fund Investment Strategies You Can Swear By

As you head into the world of mutual funds, here are six strategies that will help steer you through the murky depths of what can sometimes be a confusing investment genre. Don’t let yourself become overwhelmed; simply take your time and cover your bases.

Start now. Nothing will build your nest egg like time, and it’s never too early (or too late) to start taking care of your financial future. Every study in this area shows that the sooner you start investing, the more money you’ll have later, thanks to the power of compound interest.

Max out. The more money you invest, the faster you’ll become a successful investor. Put as much money as you can possibly afford into your investment plan, even if it means sacrificing some of life’s luxuries.

Learning is earning. When you know enough about the holdings in your portfolio to make all the decisions that impact them, you’ve seized control of your financial future. Read everything you can about investing and finance, and make sure you understand all the ins and outs of every mutual fund prospectus you read. The reward for all that hard work will be a nest egg you can draw from for a more financially comfortable life.

Be aggressive. Caution is a good approach when you’re at or very near retirement, but it’s a disadvantage for other investors. Time and again it’s been proven that to grow your money faster, a hefty portion of your portfolio should be earmarked for high-performance stock funds. If you only buy conservative investments like bond or money market funds, your chance of seeing inflation-beating returns is virtually nonexistent.

Keep the money working. Don’t be tempted to take money out of your investments or borrow against them in order to meet short-term financial crises at home. It’s important that the money you’ve invested be allowed to do its job over time so that you can meet your long-term financial objectives. If you hit a financial stumbling block, try to find other ways to get over it before you even think about tapping your investment monies.

Keep an eye on the market. Don’t ignore market trends as you’re evaluating your holdings or making new investment choices. No matter how well a fund is managed or how well it’s performed in the past, changes in the overall geopolitical and economic climate can turn the markets upside down. Wise investors keep an eye on the overall trend of the markets and adjust their investments accordingly.

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