for Retirement - How to Buy Mutual Funds including Equity, Index, Money
Market and Bond Funds - Load Versus No-Load Funds
New York Stock
Planning for retirement can be challenging, especially when you are
trying to figure out the best strategy to make sure all your future
needs are met. The first step is determining what your retirement is
going to cost.
You will need to total your annual expenses in retirement. This total
may range anywhere from 70% to 90% of your current income. If you plan
it right, your home will be paid off or you may want to move into a
smaller house. Some of the complicated estimates include determining
future health care costs or insurance premiums. It can be difficult to
predict the future inflation and other factors.
Since most people donít have time to keep track and research stocks to
figure out which is best (or maybe they find better things to do with
their time), many investors turn to mutual funds. Mutual fund companies
invest their money in stocks, bonds and other securities. Each investor
owns shares, which represents a portion of the funds holdings.
There are three ways to make money from a mutual fund. First there is
the money earned as dividends on stocks and bonds. The funds pay out
nearly all income they receive over the year to fund owners in the form
of a distribution. Second, if the fund sells securities that increase
in price, there is a capital gain. Most funds pass these gains along to
the investor. The third way is by selling your mutual fund shares for a
Funds are managed by professionals and are usually well diversified. By
owning shares in a mutual fund instead of owning individual stocks or
bonds, your risk is spread out. The larger mutual fund companies will
typically own stocks in hundreds of companies.
It does not take much money to invest in mutual funds. Many banks will
have their line of mutual funds. Some companies have automatic purchase
plans for mutual funds.
Cost is the biggest problem with mutual funds, and is one of the reasons
some funds end up with sub-par performance. Costs can be hidden through
layers of financial complexity and jargon, but they can be broken down
into two types: yearly and transaction.
Continued on Second Page
By Dan Wilson
Books on Investing
Keywords and misspelling: mutuel investmint investing intesters
Berkshire Hathaway hathway birkshire coke gillet gillette gilette Buffet