Family Funds: Time To Get Together

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Family Funds: Time To Get Together

Do you like a car with stick-shift transmission, so you can squeeze the maximum performance out of it, or you prefer the comfort of a car with the automatic transmission?

The Joy Of Ride
When I was younger, I loved stick-shift for the very felling a Nascar driver has before the green double-light hits the bottom… Every time staying on a cross-road, I was rubbing the stick, trying to catch the very 0.01 second moment before the green light to shift the baby into the first, count to three, shift to the second, count to five, shift to the third, ready to unleash the full potential of 200+ horses under the hood, and out-run that jerk on my right

. That was my favorite game… But I’m getting old and I’m enjoying different things like automatic transmission and bigger trunk…

Investing in mutual funds is about the same. While you are young, you may want to invest into more riskier, fast growing funds; and when you are older, you want less risk. Wouldn’t be nice if you can just move your assets from one fund into another without changing the fund managing company, thus avoiding all that stress and fees? You can do it with Family Funds.

Join The Family
Family Funds give a beginning investor an inexpensive chance to sample many different types of mutual funds without additional big fees and many newly opened accounts. There is a parent fund in a family and under that fund there are many brothers and sisters, and you can switch among them as you investment strategies shift. Those child funds can give you the both possibilities of stick-shift and manual transmission comfort. In most families there will be a Money Market Mutual Fund, a Bond Fund, Income Funds, Growth Funds, and Growth and Income funds (balanced funds).

Fund Family Pie Each fund within the family has it’s own merits and avenues to travel to reach its shiny goal; and I would recommend to check the funds inside the family before joining it: fees, manager, investment strategies.

The big advantage of buying a fund associated with a family fund is that these families allow switching inside the family between funds, just make the assets transfer and next day you will be making money in completely different way. My favorite family of funds is Vanguard funds (I’m not associated with them), just because I like their web interface and I had no issues with them so far. Another good example can be Fidelity funds - some of my friends use them, and they had no issues with them as well.

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This entry was posted on Monday, July 2nd, 2007 and is filed under Fund Basics. 1,086 Views. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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