But the basic asset configuration is your first defense against undue losses, and that should help prevent even moderately seasoned investors from making precipitous decisions. Corrections in all markets will always occur. This is why truly successful investors have a long-term investment horizon. Mutual fund investing can help reduce risk. The reliance on expert management skills and asset allocation within a given mutual fund are two key benefits to the long-term investor.
Index funds can be particularly useful for long-term investors.
In fact in the past five years, the number of index funds has increased from 17 to 100 or more. As with any of your investments, unless you're have a lot of market experience, always consult with your financial advisor before making changes to your portfolio. Those are the times to remember that a key rule of investing is making sure you don't put yourself in a position to lose more than you can afford to - literally. In other words, if you can't sleep at night, your risk level is too high. The information in this article is deemed reliable, but is not warranted.