Basics on Mutual Fund Investing

Back several years ago when I was working with World Financial Group Inc one of the things I use to help people do was build their investment portfolio so it would fit their needs and risk level.  In this article I’m going to give you the basics on mutual fund investing and how to build a successful mutual fund portfolio.

What Is Your Risk Level

Do you want to learn how to become a millionaire by investing? The first thing you need to do is figure out your risk level.  This should be based off of several factors that you need to consider like your age, short term risk and long term risk, but what happens in most cases people will just end up picking a bunch of funds on a sheet of paper that they know nothing about.

Instead the easiest way to get started is to use the Morning Star Asset Allocation questionnaire.  This is a simple seven question quiz that will give simple multiple choice answers.  In the quiz they will ask you what your age is, what type risk you can handle in the short term and in the long term.  Using this method will give you a much better chance for accuracy.

The Kind Of To Invest In

Next, once you’ve determined your risk level you can start to pick your funds, however their are two ways to do this.  The first way is to pick individual funds yourself, but this will require the knowledge  to know what the funds investment objectives are, and what kind of risk level it has.

A better solution is once you’ve completed the Morning Star Asset Allocation is to use the predefined models that the mutual fund company has already put together for you .  The reason this is better is because instead of investing in a few different funds is the company will actually invest your money over many different funds.  By doing this you will be able to minimize your risk by even more and help you see better returns.

A Final Thought…

As a final thought before I let go is that not all companies offer the Morning Star Asset Allocation Models.  So make sure you learn the investment basics and before you invest with any company that you ask them if they offer this service.

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