Mutual Funds Are Appropriate For Every Level of Investor
A lot of investors will look at mutual funds as a great way to start investing.
This is because mutual funds can offer a complete and comprehensive investment vehicle for people who have little money to invest.
However, mutual funds really are complete and comprehensive and can provide investment solutions for everyone, including millionaires and billionaires.
The difference between the investor who is just starting out to invest and the wealthy investor is that their needs will be different.
Someone starting out will need a mutual fund that incorporates all of the essentials of investing.
These essentials are cash, fixed income, growth/value equities, foreign equities, and specialized equities.
For the investor who is just starting out, the type of all-inclusive balanced fund described above becomes, well, "busy.
" There is a lot going on in the balanced fund, including one of the biggest determinants of long-term investment success: asset allocation.
Does that mean that as your asset base grows you should get rid of your balanced fund that you are quite happy with? Not necessarily, but what most wealthy investors will find is that they not only have a greater interest in their investments, but they want to pick-and-choose their investments.
Since a balanced fund is all-encompassing, it may include sectors or assets that you may not believe in.
For example, if you do not believe in foreign real estate and your balanced fund does, you may want to put your own portfolio together.
And this is what many wealthy investors do.
They will invest in a bond fund that meets their needs and beliefs, an equity fund that they believe in and so on and so forth.
For independent investors, mutual funds may fill a hole when it comes to their individual knowledge base and comfort level.
For example, many investors are comfortable picking stocks (equities) but have little knowledge or interest in the bond market.
As a result, they will invest in a bond fund to so that their overall portfolio is properly balanced.
Overall, mutual funds are available for all types of investors.
Whether you need a way to start investing properly or you need to fill a gap in your current portfolio, mutual funds provide a wealth of options for every investor.
This is because mutual funds can offer a complete and comprehensive investment vehicle for people who have little money to invest.
However, mutual funds really are complete and comprehensive and can provide investment solutions for everyone, including millionaires and billionaires.
The difference between the investor who is just starting out to invest and the wealthy investor is that their needs will be different.
Someone starting out will need a mutual fund that incorporates all of the essentials of investing.
These essentials are cash, fixed income, growth/value equities, foreign equities, and specialized equities.
For the investor who is just starting out, the type of all-inclusive balanced fund described above becomes, well, "busy.
" There is a lot going on in the balanced fund, including one of the biggest determinants of long-term investment success: asset allocation.
Does that mean that as your asset base grows you should get rid of your balanced fund that you are quite happy with? Not necessarily, but what most wealthy investors will find is that they not only have a greater interest in their investments, but they want to pick-and-choose their investments.
Since a balanced fund is all-encompassing, it may include sectors or assets that you may not believe in.
For example, if you do not believe in foreign real estate and your balanced fund does, you may want to put your own portfolio together.
And this is what many wealthy investors do.
They will invest in a bond fund that meets their needs and beliefs, an equity fund that they believe in and so on and so forth.
For independent investors, mutual funds may fill a hole when it comes to their individual knowledge base and comfort level.
For example, many investors are comfortable picking stocks (equities) but have little knowledge or interest in the bond market.
As a result, they will invest in a bond fund to so that their overall portfolio is properly balanced.
Overall, mutual funds are available for all types of investors.
Whether you need a way to start investing properly or you need to fill a gap in your current portfolio, mutual funds provide a wealth of options for every investor.
