If you’re clueless in 2013, your best investment and the best mutual fund is one and the same: an investor-friendly mutual fund sometimes called a fund of funds. I call this the best investment for the inexperienced investor because it offers two huge advantages.
Investors need a balanced investment portfolio of stocks and bonds to smooth out the risk of investing. Few investors have the experience or inclination to go it alone. The first advantage of what I call the best mutual fund for most folks in 2013: the fund company (investment company) does the investment management for you. You simply decide whether you want to be conservative, moderate or aggressive in terms of risk.
To find your best investment, go to the investment company’s website and search for the mutual fund category called BALANCED or ASSET ALLOCATION. When you invest money, you will actually be buying shares and will own a small part of a large investment portfolio of stocks and bonds. Often times, the portfolio will simply consist of stock and bond funds managed by that investment company. That’s why I say your best mutual fund is sometimes called a fund of funds.
Now let’s talk about the other big advantage, using a $10,000 investment as an example. It can cost you $500 off the top in sales charges and more than $200 a year in fees and management expenses if you go through a sales representative. Or, you can go with a NO-LOAD fund company like Fidelity or Vanguard and pay less than $100 a year for expenses, period. That’s what I call the best mutual fund, your best deal and best investment.
Some folks are lead to believe that you get what you pay for in the investment world. I spent over 20 years as a financial planner, and I know the truth. The best investment company is a low-cost investment company. The two I mentioned above qualify, plus they are the two largest in the business. Every dollar you add to the cost of investing in a mutual fund is a dollar subtracted from your net investment return.
If you are clueless in 2013, and want to own a very small part of a large professionally managed investment portfolio… the best investment and the best mutual fund for you is a no-load, balanced fund. Simply search for “no-load funds” on the internet, and you’re on your way to investment success and low-cost investing.