Most endeavors that could be good for you do not come with a solid guarantee from someone you can automatically trust. So, you must read, study, and question others to identify the advantages and challenges inherent in each endeavor. Even when something appears viable on the surface, follow the guidance of the Holy Spirit, because it will always line up with biblical principles in a way that will truly prosper you and other people you are supposed to bless individually and corporately through church ministry.
In the investment world, you'll likely find that no load, low expense index mutual funds are good vehicles to meet stock and bond allocations of your investment plan because they offer automatic diversification due to the large number of businesses they invest in and do not require you to be a stock and bond expert and require little physical and mental effort to employ. No load means you pay no front end or back end commission to a broker to purchase them. Our definition of low expense is that you choose funds on which you annually pay and expense and marketing fee of no more than one-half a percent on the principal amount of the investment.
By using no load, low expense index mutual funds you will be leveraging the positive history of the stock and bond market and the expertise of reliable professional fund managers who pick the company shares in each fund per the particular index the fund mimics (large cap, mid-cap, small cap, total U.S. market, intermediate bonds, etc.). You will be able to find the best no load, low expense index mutual funds in many 401k type employer retirement plans and in brokerage houses like Vanguard, Fidelity, TIAA-CREF, Charles Schwab, and a few others. They will let you invest directly in the funds using electronic funds transfers from your bank / credit union account. One great thing about them is they have a history of producing higher returns year over year and over 10 to 20-year investment periods than approximately 80% of actively managed funds on which commissions are charged up-front or at the time you withdraw your money (back-end load).
Of course, if you could find actively managed mutual funds that maintain year over year higher growth than no load, low expense index mutual funds, then it would be in your best interest to invest in the active mutual funds. However, most people have no expertise in picking such funds because year over year very few active funds consistently beat the growth of the index, nor do they consistently do better over the long term. Also, they are scared to invest because of the sheer magnitude of the number of active mutual funds they would need to scour and sort thru to find what is believed to be the best funds in which to invest. Also, they are not sure how the associated commissions and investment management and marketing fees will affect their investment in the short or long term period over which investments should be held. Most simply freeze and usually do not invest in anything. The few who did pick an investment withdrew the money a short time later when the first market downturn occurred, thus solidifying their losses.
If such fears keep you from investing even in no load, low expense index mutual funds you should get the help of an adviser who charges less than 0.5% investment management fees and who can point you to funds with good past performance and expense ratios less than 0.5%. The historical track record of most every mutual fund (index and actively managed) is available. This type of information can help you decide which funds to invest in. Services like Morningstar, Yahoo Finance, etc. offer stock research apps that can help you sort thru the historical returns (going back five to ten years or more) and expenses on index and actively managed funds and find those that had higher short and long-term growth records and great overall performance ratings in their market category for many past years up to the current time. Investing in this manner with guidance from wise godly counselors will prosper you immensely as you walk forward on the path the LORD prepared for you.
Please pray for this ministry and email any questions. May the LORD bless you richly as you follow His plan!
Proverbs 19:20-21, Ecclesiastes 11:2, Matthew 27:57, Acts 17:10-12, 2Timothy 2:15-17
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