Wealth-Coaching

Mutual Funds in Retirement

Because mutual funds account for nearly a quarter
of the total assets that reside in U. S. retirement plans, chances
are good that some of your 401(k) plan balance is invested in mutual
funds. Even if you don’t personally invest part of your plan balance
in mutual funds, you no doubt have co-workers who do, and have taken
part in investment conversations about them.

Investing in Mutual Fund Shares
A mutual fund is simply a type of investment
company or firm that pools assets from a number of investors (plan
participants, in your case), and collectively invests them (for a fee)
in stocks, bonds or money market instruments. The mutual fund product
is really a mixture (portfolio) of numerous individual investments.
When you invest in a mutual fund, you buy shares of the fund, and when
the fund gains or loses value, your plan balance gains or looses
value. As a shareholder in a mutual fund, you also benefit from
professional investment management and diversification of assets. Once
you make the decision to invest part of your plan balance in mutual
funds, most of the work and worry of the actual transaction is handled
by your plan administrator and the investment companies. But you may
find it valuable to learn how the buying, selling and pricing of mutual
fund shares happens, and why the industry is currently concerned with
abusive late-trading and market-timing practices.