Have you ever walked into a financial institution with some money to invest? Sat down in one of those comfy chairs with a financial advisor, and then discussed what type of risk you want to take with your investments? If you have, chances are your advisor ended up investing your money into mutual funds. You probably sat in that comfy chair, nodded in agreement, and tried to understand what returns you’d be making. You may have even left wondering what the heck a mutual fund is….
It’s ok. I got you.
What are mutual funds?
THANK GOODNESS YOU ASKED. I created a handy infographic to teach you the basics of how they work. But basically…….
They’re a diversified collection of investments such as stocks, bond, or other securities, where your money is pooled with other investors to buy units/shares of a specific fund. Mutual funds are managed by professionals who decided when to buy and sell investments depending on the fund’s overall objective.
I’ve held TD’s E-Series Index funds since the age of 18. These types of mutual funds not only pay a relatively decent dividend, but also have low fees. Yay for low fees and regular dividend payments! Plus they do relatively well on an annual basis.
Did you know that Canada has some of the highest mutual fund fees in the developed world? Well, they do, and you could be losing $100-$1000’s over the long term if you’re not aware of them. Make sure to do some research before just blindly investing in any mutual fund on the market.
If you need some assistance with investing or reviewing your mutual funds, contact me!