Joanne’s Place

Sometimes when you are trying to consider what to invest in you can get a serious headache. There are literally millions of things you can invest in from stocks to bonds to real estate, the combinations are literally endless. So when you are first starting out with investing and you have no idea which way to turn, growth stock mutual funds are probably right for you.

For investors who aren’t seasoned wall street traders, mutual funds are a great place to start because they help incorporate a blend of risk and reward all while allowing “regular” investors to be able to afford to buy them.

Before you invest in growth stock funds, you really need to understand that mutual funds aren’t something you invest in and get rich overnight. Believe me, if this were the case I would own hundreds of them and be typing this on a beach somewhere. If you’re looking for something short term you’re going to have to take on some more risk and can lose everything. If you just want a short term investment that wont lose you anything try a CD or interest bank account.

The benefit of mutual fund investing is that they usually grow gradually and growth stock mutual funds they tend to make more of a profit than most. You do need to be patient though, I cant stress this enough.

So what makes a growth stock you ask? Good question. Typically growth stock companies are companies that have a strong price to earnings ratio which tells you that the company is expected to grow rapidly to accommodate that inflated stock price. The price is high because analysts and investors expect good things out of that company over the next few years. These are companies you are looking for with growth stock funds.

As always you need to be conscious of your risk and your risk tolerance. If you are investing with money that should be paying the mortgage, then investing isn’t right for you, period. Investments, even mutual funds, should be made only when you can afford it, and your investment analyst should explain all the risks to you. If you don’t understand something make them explain it in a way you can understand. If they don’t like it find a new broker!

Mutual fund brokers make money when you buy their product so make sure they work to make you happy. You wouldn’t buy a car from someone who doesn’t explain all the ins and outs would you? Then you shouldm’t buy investments you don’t understand either.

Bottom line, growth stock mutual funds are a great way to invest and set aside some of the risk that normally come with growth stock funds. Next time you’re looking for something to invest in give them a long look.