The Investment Advisor Can Put You In The Right Plan

By William Wells Bishop


A mutual fund is exactly what it says it is. It is a fund that is actually a company whose service is to provide pooled investment accounts to their customers.

Instead of building something or offering insurance, the fund is meant to invest the money in a certain way. You are buying a share of the mutual fund itself, not the investment that the particular fund owns. You investment will be a mirror image of the account, minus all the overhead fees associated with the account. This leads you to understanding Net asset value of your account. If you are going to sell your mutual fund shares, you will receive the value of each share based on its current value. You can also choose to buy more and you can usually do so on a daily basis, but you will have to check with the mutual fund manager. These shares are not traded like stocks are traded. At the end of the trading day, the value of the funds in the account are tabulated. This leads to the account being revamped each day.

Large investment funds are less liquid, which means they are safer but they do not provide high returns on your investment. A comparatively smaller investment fund would give your better opportunities on your investment. The reputation of the investment company serves as a determining factor. If many people have invested in it and they are satisfied, it means it is safe for investment. The company's name in the market will help you figure out the best mutual funds for you.

Since you wont be watching these on a daily or weekly basis most likely, make sure you sit down and understand what fees you are subject to. You don't want to pay someone else to manage money for you that is not making good money in return. Estimate the time when you would be requiring the money you had invested along with the benefits out of that investment. This estimation could be a good option of finding top mutual funds for you, making your investments more secured and goal-oriented.

If you are looking forward to being a long-term investor and growing your capital, the aggressive growth fund would be the right one for you. These have high potential of return on capital but equally high chances of risk. If you cannot afford the high risk factor but are interested in adding to your capital growth then either growth, international and sector mutual funds would be the top ones for you.

A good mutual fund advisor should check in with you every six months. You will probably get monthly or quarterly statements about you account, but your fund advisor should contact you every six months and go over those statements and see if you have any questions. And do not be shy to ask any questions you have. It is your money and you need to oversee your advisor. Your advisor needs to encourage you to sit down with him on an annual basis. At this meeting you should discuss with him not only the investment results, but also what your investments goals are now. Most likely they will not be changing every year, but there will be times that your plans have changed. And your investment advisor needs to be aware of what changes on going on in your life that might affect your plan.