Best Funds to Invest in Your 30s and 40s
By the time people reach the age of 30, they have either started investing already or they are seriously thinking about it.
While there is no one-size-fits all investment strategy for people in their 30s and 40s, there is no doubt that mutual funds are one of the best investment types for savers of all kinds to take advantage of the strength and diversity of mutual funds.
Here are some of the reasons mutual funds are best for people beginning to get serious about investing.
Simplicity: Not that people in their 30s and 40s can’t handle complex financial concepts, it’s that most investors in their middle years don’t typically have large nest eggs or complex financial needs.
Diversification: Since mutual funds hold dozens or hundreds of other securities, such as stocks and/or bonds, investors can get started with just one fund or build a portfolio with several funds.
Accessibility: There is very little money or financial skills necessary to buy mutual funds.
But mutual funds are not just for people beginning to get serious about investing. They are used by professional money managers and expert investors around the world.
People in their 30s and 40s still potentially have 20 or 30 years before reaching a big financial goal like retirement. Therefore middle-aged investors are long-term investors. Although all investors should be aware of their own investment objectives and risk tolerance, the longer you have until you need your money, the more aggressively you can invest.
Here are the basic types of funds that middle age investors are wise to consider:
Target Date Mutual Funds: As the name suggests, Target-Date Mutual Funds invest in a mix of stocks, bonds and cash that is appropriate for a person investing until a certain year.
Balanced Funds: Also called hybrid funds or asset allocation funds, these are mutual funds that invest in a balanced asset allocation of stocks, bonds and cash. The allocation usually remains fixed and invests according to a stated investment objective or style.
Sector Funds: For those middle-aged investors with relatively large nest eggs, such as $100,000 or more, a fully diversified portfolio might consist of a few broadly diversified index funds but these investors may consider adding sector funds to the mix.
Any investor, assuming they are at least 18 years, can buy mutual funds at virtually any fund company or brokerage firm that offers them. The best place to buy mutual funds for anyone who wants to invest without an advisor, should use one of the best no-load mutual fund companies.
“You will want to consider mutual fund companies that have wide variety of mutual fund categories and types because you will need to continue building your mutual fund portfolio for the purposes of diversification” said Salomón Juan Marcos Villarreal president of Grupo Denim.