Good mutual funds are not expensive

Good unit trust and mutual funds are not expensive, and you do not get what you pay for when you pay for high charges and fees. In fact, these extra costs drain money from your account and work against you. The net result is a lower return on investment. I don't call that investor friendly. When there's a high cost if investing, that's not where to invest your money.

Now, once you've opened an account with one of the friendly companies you could be facing a list of more than 100 choices to choose from. Now the question of where to invest gets more specific. How do you find good mutual funds to invest in? The general categories are stock (equity), bond, money market, and balanced funds (the latter being a combination of the other three). What you need to understand is that even good mutual funds in the stock category might lose money in 2014 and/or 2015. If the stock market falls, these funds in general will not be good investments. Also, if interest rates climb, bond funds will not be good investments. More than anything else, the markets determine whether or not investors make or lose money. On the other hand, good mutual funds tend to outperform the rest over the long term.

With today's record low interest rates money market funds don't look like good investments because they pay almost nothing in interest. But, that's where to invest money you want to keep safe. If rates go up, money market rates will follow. Balanced funds will be losers if stocks and/or bonds take a big hit. Don't get depressed. Invest in 2014 and 2015 with your eyes open.

Going into the year 2014, stock funds were very good investments for five years straight; and bonds funds were good mutual funds to invest in for over 30 years. In 2014 and beyond things could get rough. Focus on strategy more than picking good investments in each fund category. Have some cash in a money market fund awaiting future opportunities when the dust settles. Spread your money across all four fund categories, because no one really knows where to invest in times of uncertainty.