In the process of investing, mutual funds incur capital gains and losses, and receive dividend and interest income on their investments. At SMI, our primary investing focus is on mutual funds rather than individual stocks. For most investors, we think funds are the most cost-effective and efficient way to gain exposure to the stock and bond markets. That doesn't mean buying individual stocks is bad, it's just hard to do safely, efficiently, and profitably without a large sum of money. October 2000 Mutual funds are sold two ways.
Most investors understand the sales-related costs of investing in load funds.
We'd like to make extra principal payments on our home mortgage each month, but we can't do that and invest for retirement. This is a question I receive quite often. One of our model portfolios is based almost exclusively on their use. If you're not familiar with them, you might find some of the discussions in SMI a little difficult to penetrate. Time is the friend of the long-term investor.