How Do You Understand And Compare Mutual Funds?
Investors sometimes get confused when trying to compare mutual funds. With so many options, it’s difficult to tell the top mutual funds from the duds. Mutual funds are compiled of stocks and bonds. People essentially pool their money to purchase a larger holding of funds. However, before investing in mutual funds, it helps to have a few tips. Determine the best mutual fund. There are three basic types of mutual funds, including equity funds, fixed income funds and money market funds. Equity funds include stocks, fixed income funds include bond investments and money market funds include short term investments (such as certificates of deposit or commercial paper investments). When choosing a mutual fund, select a mix of all these options. Consider your risk factor. For example, a person who is close to retirement might choose top mutual funds that are heavily vested in fixed income (however, still have a small part invested in stocks). A younger investor might choose a mutual fund more h
