Although the past performance of a particular fund is no guarantee for future performance, it is wise to base one’s investment decisions on funds that have historically performed well. The following Mutual Funds have been identified as some of the top mutual funds to buy in 2012, based on these funds’ three years of risk and return data.
Mutual funds are often discussed as wise ways to invest. For those who are new to investing or are cautious investors, mutual funds can be an excellent tool for investing. Why buy mutual funds? Because they are diversified investments by design, and are managed professionally, your risks are minimized.
While you may not get to invest in the flavor of the month with a mutual fund, you also don't have to worry about your hot stock suddenly going cold, either. So what are mutual funds?
Yes, it’s true that creating your own investment portfolio can be an intimidating experience especially in terms of the risk involved in investment. However, every business involves a certain amount of risk and investing in mutual funds is no exception.
If you like to enjoy the benefits of the stock market, but lack enough knowledge or time to delve into individual stocks, investing in mutual funds could be a viable option for you.
Buying mutual funds could probably be one of the safest forms of investing when compared to other more aggressive and risky investment vehicles. People who are new to investing or those would wish others to manage their investment decisions would find mutual funds ideally suited to their requirement.
Here are a few tips on how to buy mutual funds:
1. Buy Diversification
If you’re trying to build a diversified portfolio, buying mutual funds is an essential part of that. Mutual funds are great because they are, themselves, diversified, since they invest in a basket of stocks that match a certain criteria.