Economics and Personal Finance ©2012Chapter 19:
Bonds and Mutual FundsStandard & Poor's Financial FocusEvaluating Mutual FundsA mutual fund is a business that accepts deposits from many people to invest in various ways. The value of the investment varies with the value of the funds stocks and bonds. Some funds aim for safe investments, but may pay a lower return than the more risky funds. Generally, all mutual funds have a greater interest rate than a regular savings or checking account or than a CD, so you will earn you more money. Quiz Yourself When you invest in mutual funds, ask yourself these questions: - Do you want a high-risk investment that pays more, or a low-risk investment that may pay less?
- Do you want global funds that buy stock in businesses located in other nations?
- Do you want to invest in index funds? Index funds invest in stocks listed in a particular index-such as the S&P® 500 index.
- Do you want to invest in funds that buy stocks in businesses that are known for being socially responsible?
- Do you want to invest in funds that have good environmental records?
Standard and Poors publishes the globally recognized S&P 500® financial index and provides credit ratings. It also gathers financial statistics, information, and news, and analyzes this data to help individuals, companies, and governments make financial decisions. Go to www.standardandpoors.com to learn more about this company. |