What are the differences of the mutual funds,government funds, index funds and what is the best way to put my?
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The best basic financial advice I ever read was at smartmoney.com. It is the website for SmartMoney magazine. Here is the link. http://www.smartmoney.com/university/...
They have a course called Investing 101 that is a great place to start. Please read it. Take some time (30minutes a night) and it will bring you up to speed on the basics of investing.
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A mutual fund collects money from many investors and invests in stocks, bonds, gold, real estate - whatever is needed to meet its stated investment goals.
By government funds, I assume you are referring to a mutual fund that invests in government bonds.
Index funds are mutual funds or exchange traded funds that buy all or a representative portion of all the stocks or bonds contained in a specific index like the NASDAQ or the Dow.
If you just have $500, you will have trouble meeting the minmums of most mutual funds - unless you can put the money into a IRA - which is a good idea in any event since it allows your money to grow tax free.
You could look into a program like Sharebuilder or contact some discount brokers like Schwab and see if they will let you open an account for that amount of money. You could then invest in Exchange Traded Funds like Diamonds or Spiders - there are hundreds of them . The advantage is there is no minimums and lower management expenses.
There is a lot you have to learn before you start investing. Read Forbes or Kippinger's Magazine or get a copy of Andrew Tobias'
"The Only Investment Guide You WIll Ever Need."
I suggest Diamonds (AMEX:DIA)
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