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1. Mutual funds are smart investing vehicles because:
You get guaranteed returns
They are more tax efficient
They make it easier to achieve a diversified portfolio
2. You should consider buying an aggressive growth fund if:
You need to make money quick
You are willing to leave your money in the fund for at least 10 years
Your value funds are under-performing
3. The best way to achieve long-term growth along with steady income is with:
Municipal bond funds
Specialty funds that invest in REITs
Growth and income funds
4. If you're scared of volatility, you should stick with:
Long-term U.S. government bond funds
Short- and intermediate-term bond funds
High-yield bond funds
Municipal bond funds
5. Even though they tend to have low yields, municipal bond funds can be a good deal because:
The local projects they invest in have high profit potential
Interest is exempt from federal taxes
Muni fund managers tend to trade more, generating high returns
6. When evaluating a fund, you should consider its:
Expense ratio
The consistency of its investment strategy
Its returns relative to similar funds
All of the above
7. Sell a fund if:
Returns don't beat the performance of the S&P 500 for more than two quarters in a row
There's been a manager change
It under-performs similar funds by a substantial margin for two years.
All of the above
8. What the key reason index funds have tended to outperform actively managed funds?
Low expenses
Most fund companies don't have adequate research departments
Indexes are constructed in a way that ensures their outperformance
In Lesson 6
Fund Screener
Glossary
Take
the test
Top things to know
What is a fund?
Different types of stock funds
Different types of bond funds
Choosing stock funds
Choosing bond funds
The beauty of index funds
When to dump a fund
Money 101 Lessons
Setting priorities
Making a budget
Basics of banking and saving
Basics of investing
Investing in stocks
Investing in mutual funds
Investing in bonds
Buying a home
Controlling debt
Employee stock options
Saving for college
Kids and money
Planning for retirement
Asset allocation
Hiring financial help
Health insurance
Buying a car
Taxes
Home insurance
Life insurance
Estate planning
Auto insurance
401(k)s