They say clothes, make the characters, different personalities, different outfits. Actually, it’s like picking the right investment.
In this case, Mutual Funds.
There are many different types of mutual funds. But how do you know which one is best for you?
It all depends on the kind of investor you are.
But for the most part, there are three major kinds of funds: bond funds, balanced funds and equity funds.
Whether you’re a conservative, moderate or aggressive investor, they all depend on what we call your investment personality.
A bond fund is best. If you are a conservative investor. This means that your money stays mostly stable, but your returns are relatively lower. This makes bond funds create from medium-term investments of say 3 to 5 years.
But an equity fund is best if you’re an aggressive investor and its value tends to go up or down in the short term. It also gives the highest potential returns.
It’s best for investors who want to grow their money over a longer period of time.
A balanced fund is a mix of the two. So you get the best of both worlds. It’s best for investors looking to grow their money with moderate risk over the medium to long term.
Having different kinds of investments helps manage risk. This is what we call diversification. That’s why you should diversify your investments, just like how you diversify your wardrobe.
But again, it’s really up to you and the kind of investment personality you have want to know what kind of investor you are.
Talk to a financial advisor today. They’ll give you a risk assessment test to help you find the best fund for you. Remember when it comes to growing your money. Make it mutual, invest with Sun Life asset management. Start investing for low as 1000 pesos.
Garry De Castro is a personal finance advocate, Financial Advisor, Certified Investment Solicitor (Mutual Fund Representative), investor, stock market trader, blogger, and IT practitioner. He started sharing and writing financial articles 2008 just to share his financial learnings with friends, relatives and anyone who wishes to be financially independent.