Investing In Mutual FundsSo the question is, exactly how do we invest our money in the thousands of mutual funds available? It is my opinion that the best way to invest in mutual funds is to spread our investment dollars through as many asset classes as you can. I think this will help smooth the roller coaster ride to some extent. To invest in several asset classes would include small, medium and large capitalization US stocks, each of the foreign markets including emerging markets and Real Estate Investment Trusts. If you have a lot of mutual funds to choose from you can chose one from each class or you may be able to find two or three funds that encompass all or most of the asset classes. I also suggest that you invest in an income fund which will generally be a bond fund. This will introduce you to an investment that will give a monthly yield and help you see how monthly income can be derived from your investments once you retire. We all want to be able to live off of the income of our investments when we retire so that we do not have to dip into the principle. I do my investing through the Vanguard Group, so below are some possible portfolios. These are not the only possibilities but hopefully they will let you know what I am talking about. Minimal Fund Portfolio Star Fund Asset Class Porfolio Long Term Investment Grade Bond Fund I believe that portfolios that are set up similar to these will give you the best oportunity to smooth out the market ups and downs although you cannot completely take the humps and dips out completely.
|
