Lifecycle Mutual Funds

Lifecycle Mutual Funds

Lifecycle Mutual Funds

Mutual Fund Definitions

  • Capital: Initial funds put into a mutual fund.
  • Capital gains: Profits from stocks sales within a fund which are then distributed to mutual fund holders.
  • Capital appreciation: Security values rise with opportunity to sell for profit.
  • Reinvest: Dividends, interest or capital gains distributed to a share holder who uses this income to buy more mutual fund shares. Put simply, reinvested gains earn interest on interest.
  • Income: The value of an income fund will not grow much, but generates dividends and interest.
  • Prospectus: Document with information on fund objectives, fund manager, finances, past performance and other information.

Investment Term

Short-term Investments: If you will invest for one or two years, choose a mutual fund that secures capital while generating some income.

Mid-term Investments: Money invested for two to five years requires a reasonable degree of security for capital along with opportunities for income and perhaps capital appreciation.