Any Good Mutual Fund Ideas?

[Guest bigz67]

Do you guys have any recomendations on a type of mutual fund for me to look into. I am only 19 so I have plenty of time on my side. I was thinking agressive growth, but was wondering what you guys thought. Thanks!

[dh003i]

I'd suggest you look at Vanguard and Fidelity funds. Vanguard offers the lowest expense, Fidelity offers the greatest variety of choices and relatively low expenses as well.

As to what kind of funds you want to invest in, I'd suggest all growth or aggressive growth stock funds if you're investing for retirement. However, you should be prepared for short-term volatility (namely, market crashes), and should be prepared to stick to your guns during that time. If you have a lump sum of money, I would recommend investing it all at once immediately, accross several funds. If you have a regular income, I would recommend using dollar cost averaging into an aggressive growth fund.

Again, you should be prepared for real market volatility. During the Great Depression, the stock-market plummetted to half of it's value in a very short period of time. That's the overall stock-market -- many stocks, of course, did worse. You should be prepared for the possibility that -- for example -- your investment will lose 50% of it's value or more in the short-term. If it's relative index and other funds of the same type are also doing poorly, you should be prepared to stick to your guns.

Also, you should really be prepared to stand outside of the market. Right now, for you, you probably don't know how much money you're going to need for retirement, so you should probably invest aggressively. However, as time progresses, you may start to know how much money you'll need to meet your goals, retirement and otherwise. Thus, you should figure out your own Individual Investor Index (I^3) for the rate of return you need to achieve your goals. If you're investments are meeting that rate of return on average over many years (expect off years), then you should be happy.