Best Mutual Funds - Pick Them Wisely

You have come into a bit of money, but you are not sure what to do with it. You may decide to invest in property, but you are put off by the prospect of all the stress caused by problematic tenants or high maintenance costs. You think about taking your family on a dream vacation, but you do have a little voice nagging you to do something sensible with the money rather than blowing it all in one go.

With this in mind, you may want to consider investing the money in one of the many mutual funds currently operating around the world. If you do not know much about mutual funds, here is a little breakdown:

What is a Mutual Fund?

A mutual fund is the collective investment of many people gathered into a lump sum and then used to purchase stocks, securities or derivatives which are likely to increase in value, thereby netting the investors a profit. There are many different types of mutual funds - some can net you a higher profit, but also carry a higher risk of rapid depreciation in value and losing your money; some are more stable but it can take longer for the Net Asset Value (NAV), which is essentially the 'worth' of the fund, to appreciate. Depending on how cavalier you want to be about how your money is invested, it is important to research in order to find the best mutual funds for you.

Which are the Best Mutual Funds?

In an arena as unstable as that of global finance, ones needs to ask whether there are any mutual funds which can be described as the best mutual funds. We have all seen the writing on the wall in this current economic crisis, and nobody seems to be doing all that well, so how can one define which are the best mutual funds to invest in?

Top mutual funds are, in my opinion, the ones which offer the most stability and security - you can invest your money and there is a pretty good chance that when you withdraw your investment, you will get more money out than you put in.

But maybe you are a bit of a gambler - you are prepared to run the risk of losing your investment if it gives you chance of making a massive profit - in this case the best mutual funds may be those which invest in high-risk stocks or junk bonds.

Essentially, the question you need to ask is 'Which are the best mutual funds for me?' rather than just 'Which are the top mutual funds?'

Do You Feel like a Gamble?

If this is the case, then you are chasing the 80's Wall Street dream. You want to be partying with Charlie and Martin Sheen in the limo and you want to be living in Patrick Bateman's penthouse. And there is nothing wrong with that. If you fancy this idea, then you would be best buying into one of the more high-risk mutual funds, where there is a greater chance of losing your money, but also a greater chance of making a massive profit on your investment.

Or are You Feeling a little Apprehensive?

If you do not like the idea of putting your money into a high risk fund which could mean that your money disappears in a puff of smoke, you may want to look at the more low risk mutual funds. These funds move more slowly in terms of gaining a profit and the profits gained may not be that large if you do not leave your money in the fund for very long - they are a more long term form of mutual fund investment.

The top mutual funds are the ones which stand the test of time. Whether it is a high risk fast moving fund or a more static low-risk fund, if it has the wherewithal to last in the turbulent world of finance, it is probably a good bet. The best mutual funds are the ones which can offer you a profit on your investment in the way which is most comfortable for you.