In the past year the mutual fund market like the stock market in general has taken quite a hit. 401ks that many people depend on have been crushed due to the slump in mutual funds. This time it hasn’t been just the high risk high return funds that have suffered; the low and moderate funds have also lost value. With all that said do you really want to put your money in a mutual fund?
That depends on your expectations. Do you need the money 6 months from now or a year from now? Forget about the mutual funds go to the bank and open a CD or open your mattress up. But if you are talking about long term investments, how ever you define that, then mutual funds might be for you.
It used to be that the old investment crowd would tell you to put the money in safe, dividend drawing stocks or mutual funds that have a track record of making money slowly. That point of view has come under scrutiny in the last 6 months. The argument is that nothing is guaranteed, which is true, and safe stocks and funds can go down precisely when you need them. Become more of a trader.
So what should you do? Stuff the mattress or open another CD. No, you need to keep an eye on your investments and diversify. I know that the word diversify has been used a million times when discussing stocks and mutual funds, but it’s true. Is it safe proof? No, nothing is but in the long run, it will be worth it.
