STOCKS, BONDS, AND FINANCIAL FREEDOM

So you’re only interested in no load mutual funds. But how do you find out if a fund is a no load fund? All this can be found by reading the fund’s prospectus. A prospectus is simply a pamphlet that outlines how the fund will invest your money. It’s rather boring.
Money market mutual funds is where you’re investing emergency cash reserves. These funds are the lowest risk, but also provide the lowest reward. They only buy shares in the money market and they work like a bank account. Often you can write checks against the amount of money you have invested in your money market mutual fund. Since it pays more in interest, consider swapping your traditional bank account altogether for a money market mutual fund.
A bond fund is a fund that invests in bonds, government bonds, corporate bonds, tax-free bonds or any combination of the three. There’s not much growth with bond funds, but they do provide income.
Balanced funds will mess around with anything, stocks or bonds to be achieving financial freedom. Since balanced funds invest in bonds and stocks that pay dividends, their goal is usually income, but they do offer some potential for growth to be achieving financial freedom.
Real estate mutual funds are somewhat new to the investing scene. Real estate mutual funds obviously invest in real estate, but they do so by buying several real estate investment trusts or REITS. REITS are companies that buy real estate properties, like office buildings and shopping malls. They’re kind of like mutual funds, but instead of buying shares of stock, REITS buy a bunch of different real estate properties. A real estate mutual fund then buys a bunch of REITS. Since it’s important to spread your money over a variety of different investments, a real estate mutual fund is often a great way to diversify into real estate. Consider putting some of your money into a real estate mutual fund.
Equity funds are funds that invest primarily in stocks. Equities vary greatly. Some invest in large caps, some small caps and some in one sector of the economy like technology stocks while others invest in foreign companies. Equity mutual funds offer the highest reward at the highest risk. They are not for short-term goals. But they are an excellent way to build up a large fortune.
Index funds are the coolest funds. These funds are also known as unmanaged funds or passively managed funds because they really don’t require an intelligent manager to be achieving financial freedom. Index funds buy all the companies within a stock market index. Index funds will never outperform the market averages, but they’ll never under perform them either. In fact, history has proven that they’ll make you more money than the majority of actively managed funds. This is because picking the best stocks year after year is difficult. While some managers may have one great year, they often follow it up with a lousy year, which evens out the performance of their great year. Index funds take all the guesswork out of buying stocks.



Brady Vaughn is a successful internet affiliate marketer and teacher of business and the Law of Attraction. Learn more about the projects he is currently working on at www.LegendaryProfits.com and www.pluginprofitsite.com/main-24317. Join him on Myspace and add him as a friend at www.myspace.com/perpetualcash .
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