Just because you are new and it is your first time to engage in the world of investing and finance, it doesn’t mean you won’t be able to handle investing your money in mutual funds. Anyone can do it, as long as you don’t allow yourself to be intimidated by the many technical terms that professionals are using in this industry.
In case you’re not aware, there are actually a lot of people investing in mutual funds, especially in the United States. According to statistics, there are about 10 million people who are doing it and the sad part is (not to mention dangerous) these people have no idea what they got themselves into. Another truth to this fact is that these investors are not even first timers anymore and they continually lose money every single year. I don’t want that to happen to you, which is why I wrote this article to be your guide in making your money grow, as you put it in mutual funds.
First of all, you must know that dealing with mutual funds is perfect for first time investors or the average type who are willing to shell money in stocks and bonds. To simply put it, they are like this pre-planned investment deal handled by professionals in this field. These people’s job is to make the lives of investors easier, especially when it is their first time.
As a beginner in this business, you have to first open an account where you would place your money with directions on how much should you invest and to what kind of funds should your money go to. Let’s say you first started investing to a stock called Euro Channels where you placed an amount worth $20,000. This mean that eventually you have shares from that stock, which would also make you earn a little amount from a portfolio of stocks. You will determine that amount of shares you will soon own based on the amount of share price when your purchase order has already been processed.
As a first timer in investing in mutual funds, you must know that there three kinds of funds you could choose from. Here they are:
- Money Market
Getting yourself familiar with those three will certainly give you an edge in earning big in this venture, while taking minimal risk in the process. My tip here is that you go ahead and place your money in all those three if you really want to make money in mutual funds consistently.
Investing in bonds is also one of the best things you could do when dealing with mutual funds. The risks are high on that one, but once it hits its peak, the returns would be really high, so it’s worth the risk!
Don’t lose hope when you don’t get your expected return at first. The first time is always the hardest, but you will learn from it and would eventually know some strategies related to investing.