SO,WHAT’S THE BIG DEAL?
We’ve spent a lot of time discussing mutual funds, and you may be thinking, why? Well, the reason is very simple: Mutual funds are an easy asset to invest in systematically. Remember the adage, “Pay yourself first.” That comes into play here. It’s far easier to invest in a mutual fund on a regular, disciplined basis rather than trying to buy stocks or bonds every month. However, it’s important to remember that this doesn’t assure a profit, nor does it protect against a loss.
They’re also important because mutual funds are very prevalent nowadays. Magazines run articles on what funds are currently the best, and which ones to look out for. These articles serve as a good basis for the education you need in order to pick a good mutual fund. If you have taken my advice and hired a financial planner, these arti- cles are still important, because you need to know what is going on so that you may make informed decisions. Remember, your advisor is there to help you make a decision, not to make it for you. An advi- sor will merely provide the knowledge and experience needed to help guide you to a sounder financial future.
But above all, don’t be afraid to jump into the market. We’ve already talked about how when we go to the store, we look for bar- gains and enjoy paying the sale price for goods. You should have the same outlook when it comes to buying investments. The less expen- sive the asset, the greater potential return you could achieve. That’s not to say that all cheap investments are worth buying.You have to do some homework to decide whether or not a certain investment is sound and right for you. Unfortunately, many people let themselves be ruled by fear. They don’t want to lose money by investing, so they don’t even start. That’s the worst mistake you can make.
Mutual funds that are suitable for your investment strategy are very powerful tools to help you achieve your goals. You need to have the self-discipline to invest in them and stay invested. The latter of the two actions is the hardest part. Be prepared to ride the waves of the stock market as you would with stocks. Just know that because the mutual fund is invested in several, if not hundreds, of individual stocks, the potential for losing everything may be less than if you held those individual stocks on your own.