mutual funds vs index and bonds?
July 19th, 2010
I currently have my money invested in mutual funds. With the economy the way it is I’ve seen my money going down. I want to invest in something that will make money or at least be steady. I don’t want to lose anymore money. I asked the financial advisor that I had invested the mutual funds with. He has since left the company I have my mutual funds with and is with another financial institute. What I’d like to know is what is the best way to go. stick with mutual funds or invest in bonds or some kind of index fund?
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Posted in Best Index Funds | 
Tags: bonds, economy, financial institute, index fund, money, mutual funds
I would stay with mutual funds. Your Advisor is the reason you lost money. (see top right at mutualfundwealth.com). On weekly market wrap up I list weekly best and worst fund categories and personal fund holdings.
…..Doug T
There is nothing better than buying stocks yourself. If you just do some hard research, ask the questions, and try to find out which stocks will go up and look at current earnings and future estimates, there is a good chance you will not miss. Its your money. Don’t let someone else spend it.
In 2008, almost every asset class went into decline – houses, stocks, precious metals, even oil & gas, bonds, etc all dropped.
The only class that managed to achieve a small gain was cash in the bank.
The economic situation we are seeing throughout the world is still extremely precarious, so in my opinion the risk is greater than the reward.
Most financial planners will ask you to put your money into a balanced mix of stocks, bonds and some cash; perhaps that is still a valid strategy. Others ( me included ) would suggest more in cash & bonds and less in equities; yet others would advocate total withdrawal from all asset classes ( put money in the mattress ).
Only you can decide the right strategy to use that will fit your degree of tolerance for risk. Your age, earning power, health, family, and other factors will be playing a part in your decision. Not all financial planners have your best interest at heart.
What matters is your time horizon to invest. Not what the economy is doing now, because it changes. Dont invest for the long term with a short term perspective. And thats what the second poster is missing too. The first poster is advocating putting all your eggs in a few basket, which greatly increases your risk. You would be in the same situation or even worse. If the volatility exceeds your comfort level then move more towards bonds and fixed income. Otherwise the best thing to do is balance your asset allocation according to your age and time horizon. Put the same percentage as your age in bonds and fixed income and the rest in equities.