This is how the mutual fund company makes money. You can easily determine how much risk you are taking based on the type of mutual fund you have invested in. With a single phone call, you can transfer money between different types of funds within the Mutual Fund Family. Most families contain aggressive growth stock funds, conservative stock funds, bond funds, money market funds, and many other types of funds. If you choose mutual funds as your trading vehicle, the most important decision you must make is your timing of buy and sell decisions.
Most stocks move with the market.
In fact, aggressive growth mutual funds whose portfolios consist of professionally selected stocks get absolutely devastated in bear markets. Whether you invest in stocks or funds, it is absolutely necessary to know when to be very conservative about your stock market investments. Your position is based on which way you are betting the market will go. We refer to these positions as long , short , and cash . If you buy stock or mutual fund shares hoping they will increase in value, you have taken a long position .