Investing Advice

When to get started with a mutual fund

Getting started now, not "tomorrow" is crucial. Hesitation will cost you a lot of money. For example:

Mr. & Mrs. Smith invested $2,000 each year in an S&P 500 fund beginning in 1963 and continued for only 10 years until 1973. Remember, 1969-1973 was the worst market since the Great Depression. They were very unlucky and happened to put their money in at the worst times - at the market tops, just before it sank to the year's low point. Still, their $20,000 total investment was worth $915,062 in 2001.

Mr. Smith's brother waited until 1973 to begin investing in the same fund. But with his superior market timing instincts, he put his $2,000 into the fund at the best time each year, at the market's low point just before it surged to its highest point of the year. And rather than stop saving after 10 years like Mr. & Mrs. Smith, he continued investing $2,000 each year until 1993, a total of $40,000. In 2001, his investment had grown to a respectable $886,766.

But notice that even though he had invested twice as much money and had timed the market perfectly, he didn't catch up with his in-laws who had invested at the worst times each year, but who had started investing earlier.

You see, it isn't which months you put your money in that is important, but how many years you give it to grow. Start now or your golden years may be made out of rusty scrap iron.

Sir John Marks Templeton, of the Templeton Funds, beat the Dow by 8% each year from 1937 through 1987, fifty years! He believes that God was with him.

Other Stock Market Basics Topics:

  1. Mutual Fund Advantages
  2. History of Mutual Funds
  3. NAV
  4. Dollar Cost Averaging
  5. General advice about choosing a fund
  6. Mutual Fund Ratings
  7. Evaluating Mutual Fund Investment Risk
  8. Mutual Fund Share Classes
  9. Mutual Fund Fees
  10. The Mutual Fund Prospectus
  11. How important is the manager's length of experience?
  12. Why is the prospectus hard to understand?
  13. Mutual Fund Annual Report
  14. Comparing your fund to the competition
  15. Comparing funds on an after-tax basis
  16. Average Return on Investment
  17. How Not to Pick a Mutual Fund
  18. Cashing in Your Fund
  19. When to Sell Your Fund
  20. Mutual Funds and Asset Allocation
  21. When to get started with a mutual fund
  22. Types of Mutual Funds
  23. Value Stock Funds
  24. Growth Stock Funds
  25. Small and Micro-cap Stocks
  26. Mid Cap
  27. Large Cap Companies
  28. Income Stock Funds
  29. Mutual Fund Index
  30. Enhanced Index Funds
  31. Sector Mutual Funds
  32. Stock Market Sectors
  33. Defensive Stocks
  34. International Funds
  35. Real Estate Mutual Funds
  36. Socially Responsible Funds
  37. Balanced Funds
  38. Tax-Efficient Funds
  39. Bond Convertible Funds
  40. Junk Bond Funds
  41. Mixtures of stock types
  42. Closed End Funds
  43. Exchange Traded Funds (ETF’s)
  44. Stock Picking Strategy - Picking your own stocks?
  45. Fund names, and what they really invest in
  46. How to get started
  47. Where can I start investing with no money?

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