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How To Select a Mutual Fund see also the Most Important Rule of Mutual Fund Investing With over 12,000 mutual funds in existence, selecting one can be difficult. One of the most important first steps is to ask: 'What is this money for?' If the assets are going to be used for retirement in 20 years, a new house next year, or for college for your 14 year old daughter, the appropriate investments can vary greatly. One popular method of investing is to invest assets which are needed short term in investments that are safe or guaranteed such as US Treasury Bills or CDs. The problem with these investments is that they have historically had very low returns in comparison to other investments. Stock market based investments such as stock mutual funds have averaged a far higher return than guaranteed investments. With that higher return has come higher volatility. Historically, patience has paid off -- in the 1930s, 1987 and 1989 when the stock market corrected patient investors who did not sell at a low point where able to have their investments return favorably. In fact, if you invested money in the stock market the day before the crash of 1987 or 1989 you would have had made more money in the next 12 months than you would have if you put the money in the bank.
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Contact a financial advisor in Massachusetts for more Information Why Use an Investment Advisor? IRA Accounts and top 10 ways to Beat the Retirement Clock
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