What Mutual Funds Are Like

Read Time / 2 Minutes

Theme / Financial Planning

“It was super cheap” my dad said.

During the global financial crisis, my Pop in his infinite wisdom approached me with a stock tip.  There was a company, who’s stock price was slaughtered, and he believe they would likely see a rebound.  I was 16 years old, and investing was a foreign concept.  The idea of getting a return on my money was surely attractive; yet, I was concerned my hard work scrubbing dishes and wrapping sandwiches at Togo’s would all be in vain.  So, wanting to play it safe, I politely declined the advice.

In March 2009, I was re-approached with an offer that I wouldn’t be able to resist.  Wanting to get me experience investing, my dad presented a match opportunity.  For every dollar I’d contribute, he would add another from his pocket, with a hundred buck limit.  Free money?!  Though I had yet to learn about Dave Ramsey, I knew to take full advantage of such an offer.  So, I decided to trust my dad.  We put our money together, and I made my first investment.

This reminds me of a mutual fund.  Mutual Funds gather the resources of many investors.  The aggregate amount invested in a single mutual fund often ranges from millions to billions.  This allows access from dozens to thousands of different individual investments providing a level of diversification that would be hard to accomplish as a solo investor.  Also, Mutual Funds’ investment decisions are made by a designated portfolio manager and team.  In fact, when selecting a mutual fund, you are often choosing the fund because of the trust established with the portfolio manager. 

The older I become the more I realize the value of mutual funds.  Yes, through the guidance of my Pappa, I started my journey into the investment world.  Yet, I learned pretty quick if I wanted a make money fast, pick a stock; but, if you want to make money over the long term, pick a mutual fund.

Ryan De Amicis

Wealth Advisor

408.758.6413

ryan@christianwm.com