August 18, 2006, Newsletter Issue #30: Stock Mutual Funds
Tip of the Week
Take on less risk in your stock portfolio through mutual funds. When people talk about mutual funds, they are usually talking about stock mutual funds. Stock mutual funds are like bundles of stocks that you can buy into at one time. The major benefit of stock mutual funds is that they are safer than individual stocks. Because each stock mutual fund contains many different stocks, a dip in one or two of the stocks won't affect you as drastically as if those two were your only stock holdings. The major drawback to stock mutual funds is that if one or two of the stocks does unusually well, the success will also be tempered by the rest of the holdings in the fund.
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