|You can help yourself diversify by owning a mutual fund, which invests in many different securities. And yet, you can’t just purchase any bunch of mutual funds and expect to maximize your diversification. With thousands of mutual funds available, you’ll find considerable duplication, and duplication is the opposite of diversification.
Before buying a new fund, look closely at its holdings, which will appear on the fund’s prospectus. Then compare these holdings to the ones listed on your existing mutual funds. If you see too many redundancies, you may want to look elsewhere. Also, examine the prospectus to learn the fund’s investment objective, risk, charges and expenses.
Millennials, Gen X and Baby Boomers Should Invest for Growth
When it comes to investing, baby boomers, Generation X and the so-called Millennial generation may have a lot in common.
For example, if you’re a Millennial or Gen-Xer, you’ve got decades to invest, so you may want to own a relatively large percentage of growth-oriented investments. Keep in mind though, that the value of these investments will fluctuate, sometimes significantly, and there’s no guarantee you won’t lose any principal.
If you’re a Baby Boomer, you too need to have some growth elements in your portfolio. However, since you are closer to retirement, you also have to think more about current income and preservation of principal, so your portfolio may need to include bonds, Treasury bills and certificates of deposit.
At different stages of your life, you’ll have to balance the need for investment growth against competing interests, so make the right moves at the right times.
Contact Wendell at Edward Jones www.edwardjones.com.