Frequently Asked Questions
Why choose mutual funds over individual stocks?
Mutual funds invest in many individual stocks, allowing investors to achieve diversification at a low cost. If an investor invests in a mutual fund that holds shares of Company A (say approximately 1% of the entire portfolio), the fund will lose 1% of its value if Company A goes bankrupt. If an individual invests directly with Company A, the entire investment would be lost in the case of bankruptcy. Enron and WorldCom are excellent examples of the risk assumed by investors when they invest in individual securities.
- What is comprehensive planning?
- Do I need a financial planner?
- What is a Fee-Only Planner?
- Why is fee-only compensation of critical importance?
- What is the difference between fee-only and fee-based financial planners?
- When do I pay income tax on a regular taxable account?
- What is an institutional fund?
- What is passive portfolio management?
- In layman's terms, what is the Modern Portfolio Theory?
- What is an asset class?
- What is a mutual fund?
- Why choose mutual funds over individual stocks?
- What is the difference between actively managed funds and index funds?
- If index funds serve up average returns, why have they been able to beat most actively managed funds that invest in similar securities over the long run?
- How does diversification lower my risk?
- What is the relationship between risk and return?
- Who will hold my investments?
- How much will it cost?
- How will I be billed?
Investing involves risk including the possible loss of principal. No guarantees of investment success can be offered or that a client's goals and objectives will be achieved. Investments will fluctuate and there will be periods where the investments may be worth less than the initial purchase value.