Funds For Dummies, 8th Edition, helps you avoid fund-investing pitfalls and maximizes your chances for success. When you want to buy or sell a fund, your decision needs to fit your overall financial objectives and individual situation. Fund investors make many mistakes in this regard. For example, they invest in funds that don’t fit their tax situation.
This book also covers pesky issues completely ignored by other fund books. For novice fund investors, simply finding and completing the correct application in the blizzard of forms that fund companies offer can be a challenge. And if you invest in funds outside of tax-sheltered retirement accounts, you’re greeted by the inevitable headache from figuring out how to report distributions at tax time. This book puts you on the right path to avoid these problems.
The truth is, investing isn’t all that difficult — and funds are the great equalizer. There’s absolutely no reason, except perhaps a lack of time and effort on your part, why you can’t successfully invest in mutual funds and exchange-traded funds. In fact, if you understand some basic concepts and find out how to avoid major mistakes that occur for some fairly obvious reasons, you can be even more successful than most so-called investment professionals.
Foolish Assumptions
Whenever authors sit down to write a book, they have to make some assumptions about their audience, and I’ve made a few that may apply to you:
You’re looking for sensible investments.
You’ve done some research (or perhaps thought about doing some) on mutual funds and exchange-traded funds and found the thousands of fund choices to be a bit daunting.
Your investment portfolio contains or has contained funds, and you’re looking for up-to-date information on how changes in the economy and financial markets can affect the decisions you make.
If one or more of these descriptions rings true, you’re in the right place. Mutual funds are a huge business, and they can be confusing. Today, thousands of mutual funds account for more than $27 trillion under management, and exchange-traded funds hold another $7 trillion. Although the basic principle behind funds sounds simple enough — pooled money from many individuals that’s invested in stocks, bonds, or other securities — you have to understand the different types of investments, such as stocks and bonds, and the way they work.
Unfortunately, you have too many individual funds from which to choose — hundreds of fund companies, brokerage firms, insurers, banks, and so on are selling thousands of funds. Even experienced investors suffer from information overload. Luckily for you, I present short lists of great funds that meet different needs.
And because no investment, not even one of the better funds, is free of flaws and shortcomings, I explain how to easily avoid the worst funds — and the numerous mediocre ones — that clutter the investment landscape. I also help you understand when investing in funds may not be appropriate for you and what your best options may be.
Icons Used in This Book
Throughout this book, you can find friendly and useful icons that enhance your reading pleasure and flag special types of information. So when you meet one of these margin-hugging doodads, consider the following:
Beyond the Book
In addition to what you’re reading right now, this product also comes with a free access-anywhere Cheat Sheet that can help you think about the role of fund investing in your personal and financial life. To get this Cheat Sheet, simply go to www.dummies.com and search for “Mutual Funds For Dummies Cheat Sheet” in the Search box.
Where to Go from Here
You don’t need to read this book from cover to cover. But if you’re a beginner or you want to fully immerse yourself in the world of fund investing, go for it! However, you may have some specific questions today, and you’ll want some other information tomorrow. No problem there, either. Mutual Funds For Dummies, 8th Edition, is well organized and easier to use than other fund-investing books. Use the table of contents or the index to speed your way toward what you need to know and get on with your life.
Part 1
Getting Started with Funds
IN THIS PART …
Understand investment options, risks, rewards, and diversification.
Discover the pros and cons of mutual and exchange-traded funds.
Get your financial house in order before investing in funds.
Chapter 1
Making More Money, Taking Less Risk
IN THIS CHAPTER
