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Should You Invest in Mutual Funds?

Sat, 02 Jan 2010 04:10:04 +0000

Bill Gates probably doesn’t invest in mutual funds (funds), maybe because most of his money is tied up in Microsoft stock. Warren Buffet made his billions by managing investments, so he does not need their help, either. But, if you have money to invest and don’t really know how to invest and manage an investment portfolio, you should consider investing in mutual funds. Millions of average investors do.

Keep in mind that mutual funds are designed for folks who want professional investment management at a moderate cost. These are not short-term investments, but rather are for people with longer-term investment horizons. Once you have cash reserves in the bank for short term needs like emergencies, you are ready to invest.

Should you invest in mutual funds? If one or more of the following apply to you, you probably should.

If you want to accumulate a nest egg for retirement, give these investment packages consideration. For example, if you have a typical 401k plan at work, most of the investment options available to you are mutual funds.

If you decide to open a traditional IRA or Roth IRA, consider going with a major mutual fund family. This will give you a wide array of investment options, from safe and conservative to aggressive and growth oriented.

If you want to start slow and learn how to invest as you go, you should invest in mutual funds. For example, you can set things up so that $100 a month automatically flows from your checking account to a couple of mutual funds within a fund family.

If you want to invest in stocks and/or bonds, but don’t know how to invest in them, join the crowd and do it the sensible and easy way with funds.

If you have a lump sum of money to invest from a retirement plan, a CD that matured or from an inheritance, look no further. For example, if you leave your job where you had money in a 401k, you can move it and avoid taxes and penalties with a direct rollover to a mutual fund family.

If you are retired and want to earn a higher return with relative safety, try bond funds in addition to money market funds. When you want to receive a monthly income, they will send you the amount you specify.

If you want an investment in real estate, oil & gas, or gold the easy way, invest in mutual funds and let them deal with the details.

It doesn’t matter if you are young or old, rich or of modest means, conservative or aggressive as an investor. You need an investment portfolio that contains a variety of investment types. Unless you really know how to invest and can manage your own stocks, bonds, and money market securities…you should invest in mutual funds.

Finally, if you don’t know much about investing…you’re probably a red-blooded American. As a financial planner I worked with folks from all walks of life. Few knew how to invest on their own, so I often recommended mutual funds.

A retired financial planner, James Leitz has a MBA (finance) and 35 years of investing experience. For 20 years he advised individual investors, working directly with them helping them to reach their financial goals.

Jim is the author of a complete investor guide, Invest Informed, designed for average investors or would-be investors of all levels of financial background and experience. To learn more about investments and investing and his new financial guide go to http://www.investinformed.com.

Should I switch from American Funds to Fidelity?

Sun, 20 Dec 2009 04:23:54 +0000

I am 36. Have $16K in American Balanced Fund class B shares, started in 2005. I was naive when I got into it and now am hearing bad things about loaded American Funds that they don’t perform any better than non loaded funds like Fidelity or Vanguard. It is a Roth IRA and I have no 401K plan, so it’s all I have for retirement. Do I have to pay a penalty to switch over, or should I switch over?

american funds vs vanguard indexes over time?

Fri, 18 Dec 2009 04:16:50 +0000

i have most of my mutual ira funds through american funds. my question is that over the period of 30 years, contributing 5k a year i would pay about $8600 just in loads to get into these funds. is it possible that these could outperform a variety of vanguard index funds even after paying the loads over 30 years? (generally af expenses are about .70% vs vanguard .20%).

would it be wise to continue to contribute to american funds based on year after year compounding at 5k a year, or open a 2nd portfolio of vanguard index funds and contribute $2500 to the american funds ira funds and $2500 to the vanguard ira funds each year? i wasnt sure if that would be he best move since i may lose on the amount of compounding but cut the amount of the loads in half over 30 years (approx $4300 instad)
good info..and again, i have about 15k or so already in american funds, a decent start to continue the compounding process..otherwise if i just leave them be and start fresh at a different no-load company, i am not sure if that would be the best move because i am not adding the current 15k to it (it is an ira with B shares, so they need to stay put). any added input?

What would be a good portfolio for a ROTH IRA for a 30 year old using ONLY “American Funds” mutual funds?

Tue, 15 Dec 2009 04:12:24 +0000

“american funds” was the only option offered through employer sponsered Roth plan
“american funds” was the only option offered through employer sponsered Roth plan

american funds ira question?

Mon, 14 Dec 2009 04:05:38 +0000

i know that the max annual contribution is 5,000 per year to an ira or ira mutual fund. my question is can someone ’start’ an ira with any amount? if not, why does american funds, in particular, have a chart showing the sales charge that you would pay upfront when investing any amount from 5,000 to 1 million?

i rolled an old 401k into an ira mutual fund with american funds and it was over 10k but i know that is different as well since it was a rollover. how does this apply to the before mentioned scenario? thanks in advance.
i am not worried about the minimums. i know some you can open with $0. Please read the question again..
if i wanted to start an ira with 100,000 can i? or do i have to stay within yearly contribution limits? what would stop someone from opening a 100,000 ira each year to avoid the max yearly cont?? does that make more sense now?
so the max amount someone can start an ira with is 5,000? i work for a financial institution and i am pretty sure i have started iras with at least 10k

is the min amount that you invest different for IRA’s or AIP’s the fund? For American Funds?

Fri, 27 Nov 2009 16:31:04 +0000

And what is the min for additional contributions?

American funds Roth IRA?

Wed, 28 Oct 2009 16:03:14 +0000

Im getting a small $1000 IRA with American funds, I was talking to one of there people and they told me some good companies and stuff to invest in. But im not really in the know with investing so I was wondering what funds should I invest in? I was looking at $500 Smallcap and $500 Newworld fund.

Are these good funds to invest in? If not what are some good funds with American funds?

Im signing the papers for the investment tomarrow so i need your answers fast.

by the way if anyone has invested with American funds can you tell me if you like them. Any bad things about them? Anyone better?

Thanks for your answers
Oh yeah and Im going for high risk investments to.

I have an IRA in american funds that have been loosing money,should i keep it or bank the money.?

Tue, 13 Oct 2009 15:08:39 +0000

4 sections each funds A 1=New perspective 2=Smallcap world fund 3=investment company of America 4= American Balanced ,in recent months they have been loosing money in october 2007 it was 8,100.00 in april 2008 down to 7,200.00 what advice do you have.

What should I do about my roth IRA with American Funds that is losing $400 a month?

Mon, 28 Sep 2009 08:08:00 +0000

Can I just withdraw it? There’s only a few thousand left.