Stephen Cooper

mutual funds

arizona steve said: "well, im not really sure if this is the right area for this post but ill go for it anyways. ive been looking at a lot of stuff today, mostly figuring out what all the types of stocks and funds etc are and what is the best for me. i still havent though, its all a bit overwhelming! anyways, ive discovered with the amount of money i currently have in my possesion (3,500 in the bank, and a bond that was created when i was born that has recently matured to 4k, but i havent cashed it yet. ill probably end up using a bit of that 4k to use in the market or investing in general.) i could probably throw it all into one area, with a high risk/high profit type deal, but im not sure if thats the best way for an 18 year old like me to be going about investing. then i thought about "diversifying" my money and investments. i started to look into mutual funds and got a little bit of info about them but im still pretty much clueless when it comes to them. all i know is its a pool of stocks, bonds, etc that are grouped together to help me, the investor, gain at a relatively low risk. that may or may not be the correct definition of a mutal fund, but thats what i got out of it. so then comes the question of, is a mutual fund worth investing in? if so, how much should i invest in them? would it be smart to invest some amount of money into actual stocks, and then a bit more into a safer, less risky mutual fund? my main goal in the long run is to get a bit into real esate, but i realize at my young age (18, with no credit whatso ever) it will be nearly impossible for me to get into it. even though real estate in arizona is BOOMING at the momment, it feels like all i can do is sit there and watch it all go by because i dont have the inital 100k to invest into a house and try to make a few 10g's off it. and i highly doubt any bank would be insane enough to give me a loan for that amount to get INTO real estate. i supposue theres no real purpose to this thread anymore, but your guy's comments are definitly encouraged. :D"

HappyHarry said: "Mutual funds can be a great thing, especially for long term investing. They all have a basic "strategy" they follow, and depending on your age, that could be helpful. But keep in mind, very few funds beat the overall market every year."

arizona steve said: "thats what ive been discovering lately, but are they significantly less risky than the market? would it be wise to invest a good amount of money into a mutual fund, and use the rest to play with on the market?"

HappyHarry said: "I would. Check out [url]http://www.morningstar.com[/url] and check for one with the best 10 year growth period. I'd recommend you put 1/2 your money in a good mutual fund and with the other half buy one stock of a quality company."