Know what you are investing
How do Mutual funds work?
So… You were reading these blogs and probably wondering, how does a mutual fund work?; or what are they to begin with?…
Right… As important as it is for you to know how to invest, it’s equally important to know what you are investing into.
So you will get a break down of what a mutual fund is and why they are a great investment option.
First let’s define what a mutual fund is.
“A mutual fund is a company that pools investors’ money to make multiple types of investments, known as the portfolio.
The mutual fund is managed by a professional investment manager who buys and sells securities for the most effective growth of the fund. As a mutual fund investor, you become a “shareholder” of the mutual fund company. When there are profits you will earn dividends. When there are losses, your shares will decrease in value.
Mutual funds are, by definition, diversified, meaning they are made up a lot of different investments. That tends to lower your risk (avoiding the old “all of your eggs in one basket” problem).”
http://money.howstuffworks.com/personal-finance/financial-planning/mutual-funds.htm
The key here is that Mutual funds lower your risk as investors and hard working people you do not have the freedom to throw away money by investing at a high risk. You need growth and reduced risk to ensure that at the end you have accumulated exponentially more than you have lost if you have lost at all.
The other great thing about mutual funds is that you do not have to manage them yourself as you would with stock investments. Your financial coach and your account manager will take care of your account for you.
So that’s how mutual funds work.
Remember September is also Life Insurance month. So for ways to invest and for affordable ways to find out how you can get coverage for you or your family right away leave a comment and we will be happy to help you.
Happy Friday!!
See you next week
