If you've vowed to make 2000 the year you get serious about investing, market experts at InvestorLine say mutual funds should be considered primary tools -- because the funds are managed by seasoned professionals.
Mutual funds automatically give you diversification, and you can buy into many for as little as $500 and continue investing through dollar-cost averaging -- putting in relatively small amounts on a regular basis. There are hundreds of funds to choose from, each with different investment objectives and characteristics.
Before settling on a fund, know what its expenses are and how such costs compare to those of other funds, the InvestorLine folks say. Be aware, too, that you may find tax planning difficult, since you have no control over the capital gains and losses resulting from sales.
Make sure to read the funds prospectus carefully to learn about investors' rights, what the investment aims are and the risks and how income and capital gains are distributed. For more information, read the fund's annual information form or its annual or semi-annual report.
