All About Mutual Funds

Use a discount brokerage rather than a full service firm for your trading of stocks, bonds and mutual funds, and keep more of your money. Discount brokerages usually charge lower fees and commissions. There is no point in paying unnecessary fees. The only downside is that a discount brokerage will not give you advice about what to buy and sell. You must make those determinations on your own.

Know how to identify risks. Investing always carries a risk. In many cases, bonds tend to have the least amount of risk, then mutual funds, and finally stocks. Each investment, no matter what it is, has a risk. You need to know how to identify the risk so that you can make wise decisions when you’re investing.

An early decision you must make is how you want to access to the stock market. If you want to be a passive trader and leave the management to an industry professional, mutual funds are good options that provide automatic portfolio diversification. If you are more of a do-it-your self-er, then picking and trading your own stocks is possible too. Splitting your investment between both is a choice that some do as well.

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