MUTUALLY BENEFICIAL
Investing in mutual funds is a simple way for new investors to get into the market.
What started as a obscure financial instrument has become extremely popular over the last 20 years and given birth to the whole financial planning industry.
We see them sold in just about every bank, insurance company, and investment agency. They’re packaged as part of savings plans, insurance plans and come in so many different “flavors.�
But although they are more accessible to the average person than individual stocks, they still require research and knowledge.
That’s where most people who’ve lost money in mutual funds fail. They’ve been led to believe that mutual funds are secure, low-risk, and returns are almost guaranteed.
The financial downturn in 2008 showed, like any other investment, how uncertain they can be. Instead of finding out everything they can about the mutual fund they planned to invest in, they left it to someone else.
As with any investment, it’s important to understand and weigh both the pros and cons.
There’s always going to be supporters and detractors of including mutual funds in your investment portfolio. The key is not to blindly follow advice, but like ANY investment opportunity, you have to do your own homework before you invest.
It doesn’t matter which investment you decide to add to your portfolio, the best protection for your investments is education.
The more you know about an investment, the more thorough your due diligence, the higher your probability of success.
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