He or she is supported by analysts who follow the progress of various companies and industries in pursuit of sound investments. Portfolio diversification means spreading your assets across various securities. This limits risk because no one security can have a major effect on fund results. The overperformance of one security offsets underperformance in another. This allows 100 percent of your money to go back to work for you.
Mutual funds can be sound investments in planning for projected college costs.
Make certain you read the fund s prospectus carefully before investing or sending money. The answer depends on a wide range of factors unique to your personal finances. Generally, if your horizon is greater than five years, you should keep some money in stocks. As noted in the stock section on Page 4, past performance is no guarantee of future success. But stocks have registered a higher annual return over time than bonds and short-term instruments.