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Finding the Ideal Mix: Investing in Mutual Funds for Growth and Safety

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Discover the perfect mutual fund balance for growth and safety.

description: a diverse group of people of various ages and backgrounds sitting around a table, looking at investment charts and discussing mutual funds.

To invest in mutual funds, you'll want to decide what type of funds match your goals, choose an online brokerage account and research your options thoroughly. Investing can be a complicated process. But the main goal for anyone who socks their money away is to make as much money as possible.

If you want to get started investing, it's important to know the ins and outs of stocks and bonds—the basic building blocks of most portfolios. The world of exchange-traded funds (ETFs) has been growing in popularity over the past few decades. While there are a seemingly endless options to choose from, mutual funds remain a popular choice for many investors.

Index funds and ETFs (exchange traded funds) are two of the easiest ways to begin investing in the stock market. They can out-perform higher-cost actively managed funds over time. An investor should have a 10-year holding horizon for small- and mid-caps and be mindful of the volatile nature of such investments in line with their risk tolerance.

The investing landscape has certainly evolved for the better over the past two decades. Gone are the days when the only way to invest was to rely on traditional stock picking. Mutual funds offer a (relatively) easy way to invest in stocks or other financial assets – although they also involve some risk.

Long-term investors can use these Fidelity mutual funds to create an inexpensive yet highly diversified portfolio. When looking for a mutual fund with a mixture of growth and safety, consider a balanced fund or a target-date fund. Balanced funds typically have a mix of stocks and bonds, offering growth potential while also providing some stability through the bond component.

A target-date fund, on the other hand, is designed to gradually shift its asset allocation from more aggressive investments to more conservative ones as the target date approaches. This can be a good option for investors who want a hands-off approach to investing and want to reduce risk as they near retirement.

When choosing a mutual fund for a mixture of growth and safety, it's important to consider factors such as the fund's track record, fees, and the level of risk you're comfortable with. Diversification is also key, as it can help mitigate risk by spreading your investments across different asset classes.

Overall, investing in mutual funds with a mixture of growth and safety can be a smart way to achieve your financial goals while also managing risk. By doing your research and choosing the right funds for your individual needs, you can build a well-balanced portfolio that can help you reach your long-term investment objectives.

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