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What You Need To Know About Investing In Certain Mutual Funds

By Jason Markum

There are many different types of funds to invest your money in when it comes to the stock market and related activities. In this article today I want to briefly discuss several different fund options that you can invest in and I want to discuss several things that you may or may not have thought about for them that are nonetheless important for you to know about.

The first thing I want to talk about today are municipal bond funds. Municipal bond funds are a pretty good way to invest in falling interest rates if you happen to be in the over 30% marginal tax bracket, otherwise they may not be such a great deal. That’s all I want to say about them.

Next I want to talk about tax reform funds briefly. Mutual funds that are designed to benefit from different tax reforms that may or may not be coming down the pipeline are not something that most investors should mess around with. These types of funds usually concentrate on shorter term gains and massive use of leverage in the form of shortselling as well as options and futures.

Next I want talk about low-risk stock funds. These funds often market themselves as growth and income funds. One benefit is that they often offer dividends as well as the growth of principal. That may or may not be true so be sure to do your homework before you invest in them.

Next I want to talk about tax free money funds. These types of funds often offer the highest after-tax yields but often only for investors who are over the 30% tax bracket.

Finally I want to say a quick word on public futures funds. These commodity-based funds are often very bad investments. They usually offer fairly low returns and inconsistent performance. Also they contain higher risk because they often use massive amounts of leverage. At the same time they almost always charge extremely high fees, sometimes exorbitantly high fees. Your ordinary investor would do well to stay away from these sorts of funds.

There you have several tips about certain types of funds and whether or not to invest in them safely. As for any investment opportunity, it is incredibly important for you to do your own homework and your own research as well as your own future analysis to determine whether or not the investment is right for you and your portfolio needs.

Sometimes these investment opportunities will look better than they would if the current economy and in fact the stock market as a whole is in bull market mode. The real test for these funds is how well they stack up during bear markets and recessions. As of February 2010 we are still in one of the largest recessions of our country’s history which makes investing particularly treacherous at the moment, so be careful out there!

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