Capital Preservation Money market mutual funds preserve initial investment. Interest rates vary, but are usually much higher than in a savings or money market account. Mutual Fund Investment Guide Print this sheet to use as an aid in selecting the appropriate mutual fund investment strategy that is best for you. In the short term, stocks are volatile. The amount of volatility, if any, depends on the nature of the stock.
Stock issued by large and established companies are less volatile, steady growers.
Stocks of new and smaller companies tend to have more volatility but greater growth potential over the short run. The volatility and aggressiveness of a mutual fund also lies with the manager's investment strategies too. These will be described in the individual mutual fund's prospectus, an informational booklet which describes a fund's returns, risks, portfolio and investment strategy. One way that investors insure their failure and doom is to become nervous and sell out as soon as the value of the investment drops. In the short term fluctuations in the value are normal and are to be expected.