It’s Mutual – Stock Funds

52 Simple Ways to Manage Your Money – 26. It’s Mutual – Stock Funds

What it is…

A method of investing in the stock market with a pool of money contributed by a number of investors. A professional manager buys and sells stocks according co parameters set by the specific fund.

How it helps…

Provides diversification by investing in many different companies within many different industries.

Potential returns can exceed taxes and the rate of inflation.

Allows you to invest in the stock market with small amounts of money ($100).

It’s convenient.

Key items to look for…

A fund that fits your goals and objectives.

A track record consistently above average for each of the last five or ten years.

A professional manager or management team that has been with the fund long enough to earn a good track record.

The costs of getting into or out of the fund and the annual fee.

Determine if you are going to analyze the various funds and make the selection yourself, or if you are going to use an advisor.

Time …

Ten hours or more to review goals and analyze funds (less if you hire an advisor).

Three hours a month (ongoing) to update and review (less if you hire an advisor).

Keys to action …

Establish your primary objective (growth, income, tax savings, safety, etc.).

Determine a dollar amount to invest.

Determine a time frame (three years minimum).

M Familiarize yourself with the topic of mutual funds through magazines, books (such as Creating Your Own Future A Woman’s Guiek To Retirement Planning), or classes. ■ Investigate at least three mutual funds.

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Make your selection.



Recognize this as a step toward diversifying your holdings.


Be prepared to make the commitment.


No need to move quickly. You can save while you are learning.


Your conversations regarding the stock market.

Your reaction to the potential returns.

Your preference in making the selection yourself or hiring an advisor.

Your willingness to make a three-year (or longer) financial commitment.

But what if…

I make a mistake?

Cut your losses and try again.

Thought primers…

At the thought of investing in the stock market…

When I see the value of my investment go up…

When I see the value of my investment go down ..

Being responsible for investing means…

Understanding the risks makes m e…

At the thought of watching my investment grow…

It's Mutual - Stock Funds
It’s Mutual – Stock Funds