Elder L. Tom Perry’s advice in regard to building an emergency fund and retirement savings is to be wise and prudent in our investment by adding consistently and regularly to them.
You are breaking the following four principles: (1) stay diversified, (2) invest low-cost and tax-efficiently, (3) know what you are investing in, and (4) don’t spend too much energy on trying to beat the market.
Six good sources of information for researching individual stock are (1) mutual fund monitoring companies, (2) stock brokerage firms, (3) fund supermarkets, (4) financial Web sites, (5) financial publications, and (6) libraries.
Turnover is a measure of the amount of trading activity that takes place during a given period; turnover is shown as a percentage of the average amount of total assets in the fund. It is an important consideration when buying a mutual fund because, if it is high, it can increase the amount of taxes and transaction costs that you will pay.
Index funds are mutual funds, or exchange-traded funds (ETFs), that hold the same proportions of specific shares as the proportions of shares held by a specific benchmark or index. The goal of index funds is to match the benchmark performance of a specific asset class.
