Choosing individual mutual funds for your personal retirement portfolio or
company retirement plan can be challenging, especially since each business
and each investor has individual needs and goals that should be addressed by
their investment selections. In addition, the best mutual funds out there
today may not be the best ones out there tomorrow.
A professional financial adviser can provide up-to-date market information
and help you tailor that information to your individual circumstances. Here
are some ideas to think about before you choose.
Why use mutual funds in your retirement plan?
Mutual funds put someone else’s expertise to work for you: The fund’s
manager provides the knowledge and day-to-day effort needed to effectively
manage your or your employees’ investments. And mutual funds are an easy way
to diversify your investing, since one fund may represent an interest in
dozens of different securities. What’s the value of diversifying? A varied
portfolio can help smooth out bumps suffered by individual investments and
increase potential long-term returns.
How can you ensure a well-diversified investment portfolio or menu?
Choosing a mutual fund rather than an individual security automatically
provides some degree of diversification, but you can do more. Based on your
goals and risk tolerance, consider including-on your investment menu or in
your portfolio-mutual funds that:
securities.
medium-sized companies, and smaller or newer companies.
for fast-growing companies and value funds that search out companies experts
consider undervalued.
independently, so that downturns in some markets may be balanced by upturns
in others.
You should be aware that there are risks associated with investing in market
sectors. In addition, global investing has special risks, including the risk
of currency fluctuation. Current economic conditions in some regions and
countries may make investments in these areas particularly volatile.
You will still have to choose individual investments, but it helps to know
the mix of vehicles you want.
Your Merrill Lynch Financial Consultant can help from there. Before
investing, be sure to read mutual fund prospectuses and provide them to
employees participating in your company retirement plan.
