Our friends at Private Wealth Management & Consulting (PWMC) put together this helpful investment information.

Private Wealth Management & Consulting

Are you interested in investing but aren’t sure where to start? Our friends at Private Wealth Management & Consulting (PWMC) put together some helpful information regarding a few fundamental investing principles. Keep reading to learn more!

Mutual Funds:
A mutual fund is a pooled investment account managed by an investment company. Mutual funds combine the monies of many investors to allocate them toward the fund’s stated objectives. Mutual fund balances are subject to fluctuation in value and market risk. Therefore, when an investor redeems shares, they may be worth more or less than their original cost. Investors must consider the charges, risks, expenses, and investment objectives associated with mutual funds. Before investing, you can obtain a prospectus containing relevant information about the fund and the investment company from a financial professional.

Exchange-Traded Funds (ETFs):
ETFs are a share of an investment company that owns a block of shares selected to pursue a specific investment objective. ETFs trade on stock exchanges and are sold by broker-dealers. Therefore, investors can buy and sell ETFs and view their fluctuating prices whenever they please. If you’re considering investing in ETFs, make sure to conduct careful research beforehand. Some ETFs lack diversity because they focus on a particular country, industry, or commodity. A prospectus containing the charges, risks, and investment objectives associated with ETFs can be obtained from a financial professional.

Index Funds:
Index Funds track the returns of a particular market index. The well-known S&P 500, an index fund that shows the growth of the top 500 companies in the US, is an example of an index fund. Passive investors use index funds because they typically offer long-term returns rather than short-term ones. This is because index funds do not buy and sell securities frequently. Therefore, index funds can be a lower-risk option. Still, it’s essential to consider whether the long-term growth will cover the fees, expenses, and trading costs associated with these funds.

Moreover, some index funds may not be representative of their given index. The S&P 500 we mentioned earlier is a clear example. As of now, the top six companies on the S&P 500 make up 22% of the entire index. Therefore, the index funds you are investing in may not be as diverse as you think. Before investing, research whether the index funds are diverse enough in conjunction with your risk tolerance.

We hope our explanations of these three investing fundamentals have encouraged you to research the investment types that work for you and your risk tolerance. We encourage our clients to invest strategically and safely. If you want to learn more about how to manage your finances or want to get in contact with a financial professional, visit our financial planning page: https://fsucu.org/financial-planning/

Securities offered through Securities America Inc., member FINRA/SIPC. Advisory services offered through Securities America Advisors, Inc. Florida State University Credit Union, Private Wealth Management & Consulting and Securities America are separate entities.

Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Past performance is no guarantee of future results. Please note that individual situations can vary. Therefore, the information presented here should only be relied upon when coordinated with individual professional advice.

Not NCUA insured – No Credit Union Guarantees – May Lose Value – Not a Deposit – Not Insured by any Government Agency

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