[header] How to compare mutual funds [title] Assess your risk tolerance. [step] All investing carries some level of risk, but some investments are riskier than others. Funds that offer higher potential rewards also tend to carry the highest levels of risk.
[header] How to compare mutual funds [title] Assess your risk tolerance. [step] All investing carries some level of risk, but some investments are riskier than others. Funds that offer higher potential rewards also tend to carry the highest levels of risk.
[substeps] Your risk tolerance depends on how much money you can afford to lose, and how long you plan on holding your investments. You may have a higher risk tolerance if you have a high regular income or a lot of other assets, and aren't as dependent on your mutual fund investments for income. In comparison, the low/high risk investments tend to offer the highest returns. [substeps] Consider other risk factors, and work on lowering your risk tolerance so that you can achieve higher opportunities. For example, a multimillion dollar investment may offer hundreds of million dollars. Compare your risk tolerance level to the level of both mutual funds you plan to invest in. This helps to limit your risk tolerance in relation to the rewards you receive. [substeps] When you invest in real estate, you buy a maximum number of shares at one time and then reduce those shares to $100 every 2-3 years by 60 %.