Get your free guide on mutual fund investing that can help you achieve your retirement income goals.
Get your free guide on mutual fund investing that can help you achieve your retirement income goals.
Learn more about how mutual funds can help—or harm—your portfolio with Six Pitfalls of Funds. The insights in this guide can help you weigh the pros and cons of mutual funds, and determine the right strategy for you.
Download The GuideIt’s challenging to know how much of your portfolio to invest in mutual funds or if they’re even the right type of investment for your financial goals. While funds can be an effective investment tool at times, they are not a comprehensive strategy on their own. Download Six Pitfalls of Funds to learn the pros and cons of mutual fund investing, so you can determine whether they belong in your retirement portfolio—or not. This guide is just one of the many ways Fisher Investments helps investors like you gain clarity and avoid costly mistakes.
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Learn MoreMutual funds pool the money of multiple investors into one large fund of stocks, bonds and other securities, and they can be a cost-effective way to diversify smaller portfolios. Mutual fund investing can also provide access to professional money management services that otherwise might not be available. However, if you’re investing $500,000 or more, you may benefit from a different, more personalized approach.
Smart investors align their portfolio mix with their long-term goals and objectives, which can be difficult to do when investing in mutual funds. Since mutual funds are designed for a broad group of investors—each with their own individual goals—they can’t be tailored to your unique needs. Additionally, you have little control over the investments within the funds. Unlike working directly with a personal money manager, mutual fund managers aren’t available to help advise and personalize your investments. They simply invest based on the fund’s prospectus.
You have access to a whole universe of funds, so knowing the difference between them is crucial. Let’s review the common types of mutual funds you might use to bring diversity to your portfolio.
These can include stock and bond funds, or funds more specific to a particular investment category like company size or investment style.
These funds are designed to mimic the performance of a market index like the S&P 500, NASDAQ, DOW Jones or other indexes.
These often feature an asset allocation comprised of a mix of different types of securities.
This type of fund focuses on income-generating investments such as dividend-yielding stocks, bonds or other fixed income instruments.
These might focus on specific sectors, regions, or socially responsible investment strategies.
Mutual funds fall into one of two categories: open-ended or closed-ended. Open-ended mutual funds have no restrictions on the number of shares they can issue to investors. Therefore, the fund will buy more of the underlying investments if demand increases. Each mutual fund share is valued based on the market value of the underlying assets, or net asset value (NAV).
On the other side is a closed-end fund, which has a fixed number of shares available for purchase. The NAV of closed-end funds is based on the value of assets in the fund and calculated regularly. However, the price it trades for on the exchange is market-driven, allowing a closed-end fund to trade at a discount or a premium compared to its NAV.
Mutual funds may seem like a surefire way to diversify your portfolio, but they come with unexpected risks like a lack of personalization, surprise capital gains and even too much diversification. Before you add mutual funds to your $500,000+ portfolio, download this guide and discover the potential pitfalls you might face.
Then take the next step toward meeting your financial goals by speaking with one of our representatives. We’ll take the time to learn about your unique situation while answering your questions about mutual fund investing—plus much more, including:
For investors with over $500,000 to invest, mutual fund fees can be more expensive than owning their underlying holdings directly. Mutual funds can have layered fees, and investors share in the funds’ overall gains and losses—sometimes leading to unexpected capital gains taxes.
Since 1979, Fisher Investments has been a fiduciary—meaning we always put our clients first. We take time to understand their unique needs and tailor investments to help meet their long-term goals. That’s just one reason investors like you, who have worked hard to save for their futures, rely on us to manage their portfolios throughout retirement.
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