What type of mutal funds should I invest in?

Question by zephie23: What type of mutal funds should I invest in?
I plan to buy a condo in about 5 years from now.
I intend to invest a fraction of my paycheck monthly in mutual funds starting now. What types of mutual funds should I invest most in? Money market, bonds, or stocks?


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Answer by illusion_of_power17
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7 Responses to What type of mutal funds should I invest in?

  1. Pitty T says:

    Money Market Funds:

    Money market funds carry comparatively lower risks as against other mutual funds. Investor losses are rare, though they can occur. Money market funds pay dividends that are based on short-term interest rates, and traditionally the returns for money market funds are lesser than the bond or stock funds.

    Bond Funds:

    Bond funds are riskier than money market funds, mainly because they adopt strategies for giving higher yields. As there are various types of bonds, bond funds can differ drastically in their risks and rewards.

  2. Cekker Kwann says:

    You want to match your choice of “Munies” to your over all investment strategy first, and then, invest in funds you share a common objective with. An example would be what’s called “Socially responsible” funds! So, for example, you are against cutting down rain forests, there are funds which make sure no companies in their portfolio engages in harvesting rare/precious tember from the rain forest…..

  3. Uncle Leo says:

    It sounds like you’re trying to save a down payment for the condo. In that case, you should invest the money in a short term investment. A money market fund would be a good choice, especially one that invests only in U.S. Treasury securities. (Vanguard has a money market fund like that.) You don’t want to subject your down payment to the ups and downs of the stock market, because you might limit or even lose the ability to buy a condo on favorable terms.

  4. Leonard L says:

    The key to your success lies with your employer.

    If it’s a reputable company you work for, they should have a plan that you can use rather than go out and pay fees for a mutual fund.

    Many employers will match your investment/savings with some incentive to allow you to make periodic incremental payments toward a solid investment package.

    Before you go out and buy mutual funds, see what they have to offer.

    If they have one, then I would max out as much as they allow to get them to match you.

    This is the best way to build up a fund for a future.

    Otherwise, you must inquire as to what Mutual Funds can do in a short amount of time, like five years.

    Since the stock market has run up a lot in the past five years, I would be cautious and split up my investment in three different ways…say one third in government bonds, one third in foreign stocks, and one third in small cap stocks.

    If you start with about a hundred dollars every two weeks, it should be worth enough in five years for a down payment on a condo.

    I don’t expect to see condos fall much in five years, but I do see where they won’t be the great investments they have been over the last five years.

  5. Kevin says:

    Umm. . .

    Mutual funds are an investment vehicle, like stocks. Stocks and bonds are traded in the open market, like mutual funds. If you don’t know the difference, I can’t suggest you do anything but stick your money in a nice savings account with a 5% APR.

    With that said, If you pump your cash into an emerging market account, you should make great returns. Invest in anything outside the US for those awesome returns, but beware much higher risks are involved as those markets are a lot more volatile than domestic markets.

  6. Featherman says:

    If i look back at the years that have passed, one stands out – property.

  7. MonkeysPaw says:

    I dont know much about all that but i do phone surveys for a living and i can tell you that edward jones financial advisors always get great feedback from there customers. Of the probaly 300 people i surveyed maybe 1 didnt like there results.