Finance, Forex and Investments

How do i begin dealing with mutual funds?

I've just started working after college, and i'm looking for some advice on mutual funds - any books, ideas or personal experience would be great -- thank you!

Public Comments

1. "Mutual Funds For Dummies" is a good starter book - easy to read with a touch of humor. There are also tutorials at investopedia.com and morningstar.com.
2. You can find lots of information here: http://moneycentral.msn.com/investor/partsub/funds/topfunds.asp
3. Mutual Funds have proven to be a bad investment, reasons are trouble picking, out loads, etc. Get familiar with exchange traded funds, or just common stocks.
4. Standard investment advice is that you should invest in a diversified mix of stocks, bonds, and money market funds. I like Vanguard.com, other people like Fidelity, TIAA-CREF, and DFA. Buy no-load, low cost funds. If you are like most people you will invest part of your money aggressively in stock funds, and part conservatively in money market funds and bond funds. Vanguard.com has an on-line questionnaire which will give you an idea of how to do "Asset Allocation," determining how much to put in each type of fund. If your company offers a 401K plan at work, try to invest the most you can. The money grows tax free, and some companies will match your contribution. Investing in a mutual fund IRA is also a good idea. If you have children, you may want to consider a 529 plan or other college savings plan that grows tax free. I like index funds. Because of their broad diversification, you are less likely to have a dramatic drop in value. They also have the lowest expenses. For stock funds, I would suggest putting ~70-80% of your money in the Vanguard Total Stock Market Index Fund. and ~20-30% in a foreign stock index fund. However, there are many different opinions out there on what the best mutual funds are. Read the links below and form your own opinion. If you have high-interest debt, like credit cards, it is best to pay this off first before trying most of the investment ideas above. You should also have 3-6 months of salary saved up as an emergency fund in a bank or money market fund before trying more risky investments. Believing advice you get on Yahoo answers can be risky, so read these websites for further information. If you find it too confusing, contact a professional financial advisor. They will charge you significant commissions, however. Sources: http://www.vanguard.com/VGApp/hnw/planningeducation http://www.fool.com/school.htm http://sec.gov/investor/pubs/assetallocation.htm http://www.diehards.org/readsites.htm http://finance.yahoo.com/education/begin_investing http://finance.yahoo.com/funds/basics Asset Allocation Calculators (Determining how much to put in stocks and how much into bonds and money markets is a personal decision depending on your financial status. These Asset Allocation questionaires give you a rough idea how to do this. I like Vanguard best, but try some of the other sites as well.) https://personal.vanguard.com/VGApp/hnw/FundsInvQuestionnaire?cbdInitTransUrl=https%3A//flagship.vanguard.com/VGApp/hnw/planningeducation/education https://ais2.tiaa-cref.org/cgi-bin/WebObjects.exe/DTAssetAlcEval http://www.ifa.com/SurveyNET/index.aspx Web forum: http://www.diehards.org/ (Many investment web forums are overrun by scam artists. This one seems the most legitimate site.) 529 plans: http://www.savingforcollege.com
5. Alright, let me first say that the answer that recommended moneycentral is a good one...the answer that said mutual funds are a bad investment is wayyyyy off... and the long answer with several sites may make you think it's all way too complicated. First, understand what the funds are... they are a collection of stocks that you buy shares in if you buy into the fund. Simple enough...where it gets complicated is: a collection of WHAT stocks? That's why there are so many different funds...all are different avenues/ approachs to the same goal: invest to make money. A weekend of reading at a few places should familiarize you with what's available... and maybe what suits your age and goals. moneycentral, yahoo/finance, beginnersinvest.about.com Those places give you the basics...then comes your choices: are you going to start with an IRA account or just a regular brokerage account.... then comes picking the funds you will initially invest in: do you just want to " start investing" or are you going to actively try to get better and better returns? Either approach is good for your future...just a question of " different strokes". You can learn to compare funds using yahoo/finance...or MSN/money ( may have come with your computer) or money central msn/cnbc. If you are going to be passive just buy into a " balanced " or " blended" or even a " life--cycle" fund ( the name of the fund usually includes your approximate retirement date...all companies have 'em just give them different names) One suggestion: even if you are going to be passive, make that first fund something that includes " international" or " global" ( just a fact of life - that's where the money is being made right now and for a few years to come) If you are going to be more involved...get into a couple of funds... in sectors that look to have potential...like " energy".. or " emerging markets" .. " telecom" Also, read up on ETF's...if your first investment is going to be under say $ 3000. , you probably can only get into one ( maybe two) mutual funds...but with ETF's you can take " smaller bites" and spread your money into 3 or 4 sectors. Last...you mentioned " just started working"...does your employer offer a 401k ? That can be your first introduction to " investing" if they do. If they do...be sure to get in...and contribute a percentage of your pay ( it should AT LEAST be an amount equal to what your employer will " match") If you are " on your own"...don't be overwhelmed by all these terms, choices, and opinions...it's NOT anywhere near as complicated as it sounds...after you take the first steps it becomes soooo simple...just keep your eye on things. Okay, one more " hint": there are some pretty decent people here on answers...if you read some answers and click on some of the " top contributors" and view a lot of their past answers...you may find a lot of info you can use...just something to do if it rains or you're snowbound. Good luck.