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Mutual Funds 101 - Investing for Dummies

Mutual Funds 101 - Investing for Dummies

Investing for dummies can't get any smarter than investing in mutual funds.


20 Rules for Successful Investing

Saving is a Prerequisite to Investing.

Saving is a prerequisite to investing. Unless you have wealthy, benevolent relatives, living within your means and saving money are prerequisites to investing and building wealth.

3 Best Wealth-Building Investments.

People of all economic means make their money grow in ownership assets - stocks, real estate, and small business - where you share in the success and profitability of the asset.

Be Realistic About Expected Returns.

Over the long term, 9 to 10% year is about right for ownership investments. If you run a small business, you can earn higher returns and even become a multimillionaire.

Think Long Term Investing.

Because ownership investments are riskier, you must keep a long-term perspective when investing in them. Don’t invest money in such investments unless you plan to hold them.

Match the Time Frame to the Investment.

Selecting good investments for yourself involves matching the time frame you have to the riskiness of the investment. For example, for money that you expect to use within the next year, focus on safe investments, such as money-market funds.


Diversification is a powerful investment concept that helps you to reduce the risk of holding more aggressive investments. Diversifying simply means that you should hold a variety of investments that don’t move in tandem in different market environments.

Look at the Big Picture First.

Understand your overall financial situation and how wise investments fit within it. Before you invest, examine your debt obligations, tax situation, ability to fund retirement accounts, and insurance coverage.

Ignore the Minutiae.

Don’t feel mystified by or feel the need to follow the short-term gyrations of the financial markets. Ultimately, the prices of stocks, bonds, and other financial instruments are determined by supply and demand.

Allocate your Assets.

How you divvy up or allocate your money among major investments greatly determines your returns. The younger you are and the more money you earmark for the long term, the greater the percentage you should devote to ownership investments.

Do Homework Before you Invest.

You work hard for your money, and buying and selling investments costs you money. Investing isn’t a field where acting first and asking questions later. works well. Never buy an investment based on an advertisement or a salesperson’s solicitation of you.

You are what you Read & Listen to.

Don’t pollute your mind with bad investing strategies and philosophies. The quality of what you read and listen to is far more important than the quantity. Find out how to evaluate the quality of what you read and hear.

Consider the Value of Your Time...

Consider the value of your time and your investing skills and desires. Investing in stocks and other securities via the best mutual funds and exchange-traded funds is both time-efficient and profitable.

Keep an Eye on Taxes.

Take advantage of tax-deductible retirement accounts and understand the impact of your tax bracket when investing outside tax-sheltered retirement accounts.

Where Possible, Minimize Fees.

The more you pay in commissions and management fees on your investments, the greater the drag on your returns. And don’t fall prey to the thinking that “you get what you pay for.”

Ignore Soothsayers....

Predicting the future is nearly impossible. Select and hold good investments for the long term. Don’t try to time when to be in or out of a particular investment.

Minimize your Trading.

The more you trade, the more likely you are to make mistakes. You also get hit with increased transaction costs and higher taxes (for non-retirement account investments).

Hire Advisors Carefully.

Before you hire investing help, first educate yourself so you can better evaluate the competence of those you may hire. Beware of conflicts of interest when you consider advisors to hire.

You are What you Read..

You are what you read and listen to. Don’t pollute your mind with bad investing strategies and philosophies. The quality of what you read and listen to is far more important than the quantity.

Your Personal Life and Health..

Your personal life and health are the highest-return, lowest-risk investments. They’re far more important than the size of your financial portfolio.

Don’t Expect to Beat the Market.

If you have the right skills and interest, your ability to do better than the investing averages is greater with real estate and small business than with stock market investing.