Which is the right mutual fund for an investment worth $5k?

Question

I am total newbie with investment. I read everywhere in news that Mutual Funds have average 10-15% ROI..I want ge a slice of that return..
Can someone help me 2 invest my $5k in Mutual Funds?

I Appreicate it!

Answer 1

There are indeed mutual funds that do average 10-15% annual roi. There are also mutual funds that do not average 10-15% annual roi.

I can list you some that in the past have averaged that but there is no telling what they will average in the future.

PENNX about 13% over the very long term.
GAM about 16% over the very long term.
CHN about 15% over the last 10 years.
TDF about 12% over the last 20 years.
IIF about 14% over the last 20 years.

The last 4 are closed end funds traded like stocks.

Bruce Fund totally obscene returns over the last 5 years.

Now large cap stocks have performed miserably until last year. The tide may be turning. If so SPY or IVV would be good bets. S&P just recommended mid cap stock indexes as the best values for the money currently. MDY, IJH, IWS, IJJ, IJK and I do not know how many more might be worth an investment. They did make a compelling case in their analysis.

Answer 2

Invest in a No-Load Fund (no commissions when you buy or when you sell.)

Make sure that the $5k is money that you won't need for 5 years or more, because you shouldn't be in a position where you have to sell your shares. If we hit a recession or a "correction" in the market, your $5k might be worth less for a year or so. Just be patient.

You need to decide how much risk you are willing to take. I suggest you avoid the "high flying" Tech funds and others that could go down in flames. These are high risk.

Instead, go to the library reference dept and look at Morningstar.Or go online to Morningstar.com . I suggest you invest in one of the Vanguard, T Rowe Price, or Dodge & Cox family of mutual funds.

Large Cap Growth, or Large Cap Value Fund, for example.

You should also invest more, as time goes on. Diversify. Get as much variety as possible in your portfolio. Consider International mutual funds later on.

Finally, I suggest that you reinvest your dividends.

You'll be glad you made these investments. Good luck.

Answer 3

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Answer 4

You need to do a risk assessment...ie how much are you comfortable with....? Starting out I recommend a broadbased mutual fund with a five year history of fluctuations that you are comfortable with(send for prospectus)...and that you plan to continue making contributions to over time. Staying with it is easier if you have goals...home? car? retirement(my favorite). No load funds will charge more expense over time, but give you a 100% invested to start with. Hope this helps.

Answer 5

Forget that 10-15% #. Wide range of possibilities. On top of Muncie's notes two classic closed ends are ADX & PEO. Invest - don't speculate.

Answer 6

Buy a no-load index fund or two - whether ETF or regular mutual fund.

Answer 7

I would recommend you to check the website below where you can learn shares and stocks trading and also how to select best shares.
Hope it helps

http://money-review-site.com/shares.html

http://www.money-review-site.com