Mutual funds have enjoyed a surge in popularity among investors looking to realize gains that are higher than a traditional savings account or CD. Mutual funds offer investors an easy and more affordable way to diversify your portfolio investments.
There are many benefits to investing in the top 50 mutual funds, including diversification, professional knowledge and management, and affordability. It is important to thoroughly research mutual funds based on your investment criteria to find the funds that are right for you.
Online broker ETrade offers the industry’s most extensive fund research tools, where you can find and compare thousands of mutual funds, access the fund’s prospectus and professional analysis, and speak directly with an expert in mutual funds.
Investing In The Top 50 Mutual Funds For Diversification
One of the major reasons to invest in the top 50 mutual funds is diversification. Diversification is the cornerstone of a good investment strategy, as you can better mitigate risk with a well diversified portfolio.
You would need considerably more capital to properly diversify your portfolio by purchasing individual stocks than by investing in mutual funds. This is because one mutual fund can own hundreds of stocks, giving you the opportunity to invest in these securities with one purchase.
You can also spread your risk across several different mutual funds with different objectives, such as fixed income funds, equity funds, and money market funds. You can also purchase sector specific funds to give your portfolio exposure to a sector in which your portfolio may be lacking.
It is also possible to find a mutual fund that is balanced between different objectives to fit your risk-tolerance, investment objective, and age based asset allotments. Industry leader ETrade offers easy to use investing tools to help you analyze your portfolio, and assess potential areas for diversification.
Invest In The Top 50 Mutual Funds For Professional Management
Running a successful investment portfolio requires researching individual securities, making well timed purchases and sales, and vigilant rebalancing. These things can be overwhelming and time consuming, and can be a challenge to do consistently well for a retail investor.
When you invest in the top 50 mutual funds you will have access to professional management who will execute trades in order to achieve the maximum returns. Your money manager will be an expert in the financial world, and you will benefit from their knowledge and expertise.
When researching mutual funds, pay careful attention to the manager of the fund, and their tenure with the fund. A good manager, with a long tenure and consistent returns can be an excellent indicator of the fund’s future performance.
As the historical performance of a mutual fund is not an indicator of future returns, a good fund manager can be an important factor to consider when researching mutual funds. When you research mutual funds using ETrade’s fund screener, you have access to a fund manager’s information including tenure with a fund.
All mutual funds, even top-ranked funds, carry significant risk and may not be suitable for all investors. Consult with your financial adviser to find out if these investment tools are right for you.
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