A Guide For Investing In Mutual Funds With 12 Return

growth stock mutual funds with 12 return

These are funds that pay out regular dividends. It sounds great and there are certainly some solid growth stock mutual funds out there. But, what do you need to look for before purchasing? Here are some tips to help you find that perfect growth stock investment that will give you years of income.

Know Your Budget

A person standing next to a tree

First, ask yourself if you can afford to hold on to the stocks for this long. Even though growth stock mutual funds with 12 returns may sound like a good deal, it’s important to realize that it requires a sizeable cash amount upfront to start out. If you aren’t ready to invest a significant portion of your savings, don’t go for these types of investments.

Second, don’t be fooled by the hype. Some investors have jumped on the growth stock mutual funds with 12 return bandwagon, but there are no real investments here. Just like in the stock market, some stocks will rise in value and others will fall. Don’t be misled by how the ads promote these investments. Just use common sense.

Next, do your research. If you aren’t sure which companies will provide you with growth stock opportunities, then don’t invest in them. There are certainly companies out there who will provide you with great returns. Just make sure they are actually growing, instead of growing because of market conditions. The S & P 500 are a good example of this.

Make Sure You Understand The Risk Involved

A hand holding a cellphone

Third, make sure you understand the risk involved with mutual funds. A key point to remember when comparing growth stock funds to other types of investment is that there is a greater chance of loss. Some are more stable than others. Some provide more diversification than others. And, depending on the fund itself, some may not be as well-liquid as you might like.

You also want to look at the expense that goes into the fund itself. Are the costs higher than other types of funds? You’ll often find very high fees for new-age funds that lack the track record of the older, larger funds. That’s a good rule of thumb to follow.

Is Your Income Steady?

Finally, you will want to look at your own financial situation. Is your income steady? Do you have any investments that could lose value? Those things can easily push your money into a lower-grade stock that may perform worse than you think.

Final Words

It’s also important to remember that you don’t always want to invest in the top performing stocks. The best ones rarely stay that way. They either experience a run of good performance or they experience a long period of poor returns. If you want to avoid making an investment that will only earn you a loss, don’t try to time the market. Instead, find a fund that is actively invested in companies that have great potential for growth.

Subscribe to our monthly Newsletter
Subscribe to our monthly Newsletter