Mutual funds

What funds are right for you?

Many investors consider just three types of funds: stocks, bonds, and cash. That's too narrow. You should invest in different types of mutual funds, including those that invest for value, those that invest for growth, those that buy small companies, those that buy large companies, and those that invest overseas. Simply put: don't put all your eggs in one basket.

The correct mix (basket) differs for each individual investor. Your correct mix depends on how sensitive you are to risk, your investment objectives and your investment time horizon. Rather than focus on a particular company you should concentrate on the type of fund you are looking for and the advisor who will assist you with the purchase and provide the ongoing service.

Whatever mutual fund or combination of funds you choose make sure that it suits your characteristics as an investor and one that gives you the flexibility you need. Assess your short term cash needs carefully before you focus on your long-term commitments and goals. Accept your sensitivity to risk. If risk does not bother you go for the volatility that goes with investing aggressively. If risk is a concern take a slower but more level route to reaching your investment objectives.