Other Article: How to complete an economical family trip
Buying public funds for the first time seems complicated and risky, but you can do it on your own. The following simple instructions contain the key steps to help you correctly select funds and achieve your goals.
Other Article: Five golden ideas for making money by throwing things
1. Determine investment objectives: Before buying public funds, you must understand your investment objectives, when you want to get the money, and how much risk you can take – remember: public funds have risks, some of which are much greater than other investments.
Other Article: Wealth Thinking Series: Be loyal to your business
2. Use the public fund filter: You can try Yahoo’s public fund filter for free to find funds that meet your criteria. Without such tools, there is no fund to choose from.
Other Article: Top 10 commercial factoring business models
3. Choose a fund according to your purpose: If you want to make long-term investment, you don’t need to take back the money for a long time. You might as well take more risks and invest public funds in growth stocks. If you want to make short-term investments, you can invest in short-term bond funds, or even public funds in the “money market”, so that money can flow without risking it (unless it is rare for money market investors to lose a small part of their investment). You may still be willing to compromise between the two types of investment, and use some funds for stock (i.e. equity) investment and some for debt (i.e. bond) investment.
Other Article: Saving money by shopping in a small shop is not a long-term plan of thrift
4. Consider costs: Public fund managers charge investors a small amount of fees first, then put their money into the fund market and manage it. “Selling expenses” refers to the fees charged when participating in the investment; “Expense Ratio” refers to the annual cost. If you invest in a fund, its sales expense is 6%, and the expense ratio is 2%, then in the first year, your fund must achieve an annual yield of 8% (which is difficult to do) to ensure book balance. Look for funds with “zero selling expenses” and low expense ratio. Many funds with extremely low cost are “index” funds, which do not seek to break through the market index, but to keep the same. Since funds rarely break market indexes all the time, it is advisable to pay attention to costs and ensure currency appreciation.
Other Article: Sixteen examples of saving money tell you what to buy and what not to buy!
5. Risk assessment: select public funds according to their own conditions; Consider what risks you are willing to take and what losses you are afraid of. Remember that risk comparisons are always made between similar funds. Therefore, compared with “low-risk” growth equity funds, short-term bond funds are safe no matter how risky they are.
Other Article: I want to start a business; What are the risks?
6. Investment: Usually, you can make fund investment by making a direct payment – visit the fund website to see the guide. The best way is to put all the money into a public fund. If you want to invest in various mutual funds slowly, you can first open a brokerage account at Credit Suisse, Fidelity Investment Group or TD Ameritrade, and then you can easily invest in various mutual funds.