Questions & Answers: I am thinking of investing 20K for a year in a mutual fund “RYTRX”?
Question by tiger: I am thinking of investing 20K for a year in a mutual fund “RYTRX”?
I am thinking of investing 20K for a year in a mutual fund “RYTRX” I am thinking of making money on the dividends and capital gains, assuming that the value of the fund stays pretty much where it is today, Is this a good idea. Thanks
Best answer:
Answer by jlf
It’s a fairly good fund, but just remember that you have no guarantee of the fund’s return over the next year. That 12-month return could be negative.
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Have you given a look at ETF’s?
Not too many investors are messing with mutual funds anymore.
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RYTRX is a good fund, but one year is not a good time frame in which to invest in ANY mutual fund. The reason is stock market fluctuation – even the best funds lose value in a down market, and nobody knows what the market will do in the coming 12 months.
Over the LONG-term (5+ years), mutual funds are good investments because the stock market has historically gone up about 2 out of every three years, on average. The average return for stocks (and funds that invest in them) is about 9-10% over the last 100 years, but again – down markets are not uncommon in the short term.
In your case, any mutual fund is a gamble. If you are willing to face the prospect of losing money over the next 12 months, then go for it. If you’ll be needing the money in a year, I would recommend a CD. Unfortunately, this will only pay you around 2% (about $ 400), but the good news is that you are guaranteed not to lose any of your $ 20K.
I hope that helps. Good luck!
Tiger,I dont know much about mutual funds but I do know that whatever investment vehicle you choose, make sure you diversify. Nothing is guaranteed. Also ask yourself what your investment goals are. Are they long or short term, whats the money for? etc