(Newswire.net — July, 30, 2013) Phoneix, AZ– What are mutual funds? If you are asking yourself that, than you probably have some idea of what they are and that investors use them when it comes to building their wealth. Even though you are aware of them you would like to learn more in order to see if they are the right investment tool for you. Read on to learn more about mutual funds and what you should know about them:
What is a mutual fund?: In summary mutual funds are a mixture of stocks and/bonds. You and other investors combine your money together to obtain stocks, bonds, securities, which you could otherwise not achieve on your own. You are not investing in one particular stock, but are investing in a variety of investments which is helpful for those who do not have the knowledge or time to build a variety of stocks/bonds/securities on their own.
Types of mutual funds: There is a variety of mutual funds that will satisfy any investor and their investment needs. The types of mutual funds out there are bond funds, index funds, money market funds, etc. The risk for each fund varies on the type so find out which one you’re interested in and how much risk you are willing to take.
Risk of mutual funds: Many investors like mutual funds because it gives them a variety of stock options. As mentioned before the risk depends on the type of mutual fund you choose. Although the initial amount to open a mutual fund can be expensive (usually around $1,000) most see a return on their investment in the long run (this can be 5-10 years).
Be aware of expenses such as fees associated with mutual funds. They can be either transaction to commission fees if you have someone (such as a broker) handling your account(s). Also despite how high or low the risk level is for you mutual fund be prepared for you to have good days and bad days.
If you want to learn about how to become a self-made millionaire, than you should look at Mike Dillard and his group The Elevation Group. They offer advice to those who want to invest.