Mutual funds for young investors or Stocks? This is a question I receive all the time. Before you start investing your money anywhere, you must know the difference between stocks and mutual funds for young investors.
First of all the difference between a stock and mutual fund is the difference between owning part of one company and owning parts of several companies. Mutual funds give you the latter option. It also includes investment in bonds and other investment options. The mutual funds for young investors, may yield higher returns in the long run because it is much more diverse.
A young investor should not assume, however, that a mutual fund is risk free. Mutual funds are the same as stocks in the aspect that they depend on the rising and falling of the market, and can lose value. Mutual funds for young investors is much safer than single stocks because it is a diversified investment.
Now that you know the risk that is involved in mutual funds for young investors, where do you start? With todays technology it is quite simple to begin in your investing. Online brokers, for example, usually do not charge when you open an account, so check that out. They will have different rates when it comes to trades and mutual funds for young investors, so always do your research and compare. A minimum investment of $1000 is usually the standard to get started.
In conclusion, mutual funds for young investors is that safer investment. This coupled with good saving and spending habits will ensure a fantastic financial future for yourself. Mutual funds for young investors starting now will accumulate quite a retirement package by the time you reach that age.