People who do not understand how to invest successfully are often called new investors or beginners. It's not unusual to have money to invest and not know where to invest it. If you can relate to the above, give mutual funds serious consideration before you invest your hard-earned money.
The average investor should invest in bonds as well as stocks. An investment in stocks involves both higher profit potential and greater risk. The objective of bonds is less risk and higher interest income. Investors who invest in both investment types do so to get growth and interest income with moderate risk overall.
New investors should get help whenever they decide that it's time to invest their money. The investment designed to help investors manage their money is mutual funds. These investment funds are the beginner's answer to how to invest prosperously. The investor invests money and the fund company does the management and charges for its services.
Invest your money in both stock funds and bond funds. Do some comparison shopping before you invest money to lower your cost of investing. You can pay less than 1% a year for fund expenses or considerably more. You can invest money and pay 5% in sales charges or you can invest in no-load funds that have no sales charges.
Choose diversified stock funds to invest in for higher profit potential and dividends. For interest income invest in high quality intermediate-term bond funds. By investing money in both of the above you have a portfolio that is both diversified and balanced. Investing money in bond funds and stock funds involves a certain degree of risk.
To keep portfolio risk at a medium level, invest the same amount of money in both funds. Over time move money between funds to keep them close to even in value. You now know how to invest thrivingly and stay out of serious trouble as an investor.
