MUTUAL FUNDS: WHICH ONES ARE SAFER?

Basically, there are 4 types of mutual funds: investments in bonds at a fixed-income, in stocks, both stocks and bonds, and the safest type which is the money market fund (but also the less dynamic). You may base your strategy on the risk level you’re willing to accept.

in my opinion, mutual funds are an easy way to diversify an already existing portfolio but here’s the dirty secret of mutual funds: most of them fail to beat the market. One recent study revealed that 75% of them returned zero. That does not mean the money managers didn’t make money for their investors, just that they could not beat the benchmark they were being measured against

That’s right, the main problem being that most of the performance will be absorbed by the usually high fees of the fund, which makes it very difficult to beat a benchmark on the long term. After having bad experiences in mutual funds,  I´ve been investing these last couple of years in Foreign Currency Exchange (FOREX) and must admit that it has not been as good as expected: it is also an extremely high-risk investment which result as being a pure loss.

high fees? how high?

totally depends on the fund but you’re looking at entry fees, management fees, and exit fees if you want to sell. Have a look at this article in money control for example: https://www.moneycontrol.com/news/business/mutual-funds/-1872847.html

or this one too https://www.fool.com/investing/2017/02/27/mutual-funds-and-fees-what-you-should-know.aspx

not the best thing to do then??

that’s an option but you have to remember that the funds managements will charge you these fees no matter what the market does, up or down. If the market rises 2% in a year, chances are that you do 0% or less because of the costs involved. There are thousands of mutual funds, some better than others.

I´ve tried many types of investment and I agree with the above. Lately I´ve started to study and invest in precious metals, such as gold, which is another way to invest money. As we know, the value of precious metals rises when other investment values drop, but keep in mind that fluctuations must be studied on a daily basis, which represents a big investment in terms of time. I´ve been myself quite lucky but fluctuations volatility effect can have dramatic consequences

yes, it’s a hard job to find reliable investments. Real estate is another popular type of investment. Depending on your method of investing, real estate can become lucrative if done in the proper locations, proper companies and in the correct way. It’s also much safer than the financial markets. This is my advice after a few years of experience.

Unfortunately my experience was not conclusive in buying properties in a foreign country, we have to bear in mind that fluctuations can be huge. I advise you to check previously the economic and politic stability of the countries where you have the intention to invest. Return on investments can be extremely satisfactory in developing countries but be careful, we all know the terrible consequences of sudden instability. Be warned

you’re correct Francisrobinson. But there are different kinds of investments in real estate. For example, combined with tourism industry it makes it quite reliable and traditional properties are not the only options in that sector. Real estate periods are a very interesting option and can give you a good return on investment. I sold an apartment we had bought in Cyprus a long time ago to invest with Global great hotels in Spain. Around 10% annual return holidays included. I wish we had done it before. Even if some investments can be undoubtedly more profitable (higher rates), it remains very interesting and comfortable not to have to study the market on a daily basis. Honestly all depends on the time you can invest on daily studies of the market and of course your knowledge in the said sector. In case you have an interest: www.globalgreathotels.co.uk

Wow that’s good!

I don’t think I can afford to buy real estate. Can we get back to mutual funds please?

you should ask you bank or your asset manager for advice. There are many different options but make sure there is enough track record so you can check the performance of the funds managers over the last 5 or 10 years