Are Mutual Funds a Good Way to Invest For Your FutureFor individuals just getting involved in the investment game, there's a lot of wonder circulating around mutual funds.

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litteacher8's profile pic

litteacher8 | High School Teacher | (Level 3) Distinguished Educator

Posted on

Mutual funds are a little risky because they can lose value. Of course, it is hard to find any investment that will never lose value, but if mutual funds are based on stocks it can get very tricky. The value of a stock is mostly based on imagination and speculation.
lmetcalf's profile pic

lmetcalf | High School Teacher | (Level 3) Senior Educator

Posted on

Because there are so many mutual funds available that each have their pros and their cons, it is easy way to diversify one's portfolio. You could put a portion of money into an aggressive growth tech fund and another portion into a more stable fund that might not make as much money, but will not be as violatle in an unstable market.  Each mutual fund has its own mix of investments in it and that can help you save and make money for the long run.

pohnpei397's profile pic

pohnpei397 | College Teacher | (Level 3) Distinguished Educator

Posted on

I think they are.  They take some of the risk out of investing in stocks and they allow you to do so pretty cheaply.  If you pay a broker to pick individual stocks for you, you are first of all paying high fees and second of all trusting that those individual firms will do well.  With a mutual fund, your bets are hedged.  It's less risky, though you will not have huge returns like you might if you pick the right individual stock.

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