What about mutual funds?
There are thousands of mutual funds to choose from. But for an investor to be well diversified, you really only need to consider eight kinds of funds. These would include a:
Money Market Fund
Government/Municipal Bond Fund
Corporate Bond Fund
U.S. Value Fund
U.S. Growth Fund
International Stock Fund
Real Estate Fund
Natural Resources Fund
Buying more funds will most likely only overlap many positions already contained in the above funds. Most investors are aware of the Vanguard and Fidelity funds among others that have very low expenses. In addition today, there are hundreds of ETF funds to choose from and we have provided some guidance on a well diversified portfolio of ETFs. ETFs also have very low expenses.
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So, if you have some of your money in mutual funds, you may be interested in learning how well you as an investor has done compared to how well the fund itself has done.
Morningstar has recently started to keep track of average investor returns. So have you kept up or fallen behind? To find out, go to Morningstar's home page and enter the name of your fund in the "Quotes" box. When the fund's page comes up, click on the "Total Returns" button to see its performance record. You will also see a button or tab for "Investor Returns". When you click here, you will find out how typical investor in the fund did, either better or worse.
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