There
are many, many different types of mutual funds. But, before
you invest you should understand exactly what a mutual fund
is, what it means, and how to use it for a successful retirement.
Recently, a young girl called me and told me she heard some
bad things about mutual funds on the news. I told her that
was true, but just like everything else I informed her she
must put it in perspective. What they were referring to was
a small number of mutual fund companies where managers were
caught showing favoritism in trades(buys and sells) to their
favorite customers.
It worked like this, the market for buying
and selling investments closes at 4pm, say you purchase a
mutual fund at 3:55, technically
that trade should be placed immediately. Instead, they would
stack up these trades, then they would place trades of their
favorite customers, which I am sure included their families
and friends. These trades were sometimes placed after the
trading time was cut off at past 4pm. Then, after their favorite
customers trades were placed they would place the trades
of their not so
favorite customers and the prices would go up, but only the
previous favorite customers would benefit from the price
increase since they were already in the market.
Only a small number of companies have been caught doing
this, but they received a large amount of press coverage,
so don't be dismayed. There are a huge number of very good
mutual fund companies that are honest and provide an excellent
product.
Mutual funds are one of the simplest ways to invest, provided
you understand the simple mutual funds.
One of the best uses of Mutual Funds is an Individual Retirement
Account or IRA. Since social security is not guaranteed for
the future and many companies do not offer retirement. It
is important to put some money into either a Roth IRA or
Regular IRA. There are some Mutual Fund companies that have
a minimum contribution of $250 to fund an IRA account. That
amount is affordable for almost everyone so there
is no excuse, get started.
Related Links:
Retirement and Investing
Low-cost, low-fee, no-load mutual funds
Lois Center-Shabazz is the founder of MsFinancialSavvy.com
and author of the 3-time award-winning personal finance
book, Let's Get Financial Savvy! ISBN #0971979502.
Article
Archive Home
Forums | Chat | eBooks | Join
|
