Part of my goals for the month of September is to save at least half a million naira towards recent investment towards mutual funds. However, recent events have overtaken this goal. I recently invested a tidy sum in a private placement stock market ace analyst “Abayomi Obabolujo”recommended while I’m also purchasing a bit of Dangote Flour. What this means is that I may not be able to invest half a million naira. I may end up investing with N350,000.
I have been thinking about investing in mutual funds recently to diversify my portfolio and also look at the possibility of investing in the money market to ensure a steady stream of income in the long run. So when IBTC recently came to the money market with “the Guaranteed Fund” I knew it was time to commence an investment goal toward the fund. If you’ve been considering investing in mutual funds, these are some of the things you should know.
Some of my goals for investing in mutual funds are retirement and real estate investment for the future. Mutual funds can offer the advantages of diversification and professional management. But, as with other investment choices, investing in mutual funds involves risk. And fees and taxes will diminish a fund’s returns. It pays to understand both the upsides and the downsides of mutual fund investing and how to choose products that match your goals and tolerance for risk.
Key Points to Remember
- Mutual funds are not guaranteed or insured by the CBN, NDIC or any other government agency — even if you buy through a bank and the fund carries the bank’s name. You can lose money investing in mutual funds.
- Past performance is not a reliable indicator of future performance. So don’t be dazzled by last year’s high returns. But past performance can help you assess a fund’s volatility over time.
- All mutual funds have costs that lower your investment returns. Shop around, and use an average Naira margin to compare many of the costs of owning different funds before you buy.