I'm sure you have an idea how and where to invest in Mutual Funds according to your risk appetite and time horizon. If not, let me share them with you.
1. Money Market Funds
This type of fund is ideal for those who only intends to invest within a short period of time usually less than 1 year (Between 3 -12 months) and if you need the money with a year or less this fund is for you. This is usually better than keeping it in your savings account. This can be your alternative to your time deposit account since it give a higher interest (subject to risks).
2. Bond Funds
This type of fund is ideal for those who won't be using their money for the next 1 to 3 years. As the name implies,your funds will be mostly invested in Bonds and some cash. This fund is a little bit riskier than Money Market Funds but it still safe investing on this type.
3. Balanced Funds
This type of fund is ideal for those who won't be using their money for the next 3 to 5 years. Balanced funds are invested in a combination of Equities, Bonds, Money Market and keeps a little cash. Risk tolerance for this type is in between the conservative and the aggressive.
4. Equity Funds
This type is for investors who can take as much risk as they can knowing of its possible rewards when the time comes. Most of your funds will be invested in Equities (Mostly Bluechip Stocks or Strong Second-Liners) with a little cash. If you won't be using your money for at least 5 years or more, this type of fund is for you.
Regardless of what you'd choose, what matters more is what works for you.
Till the next post.
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