There are several types of mutual funds under FAMI management, that cater to different financial goals and risk appetites. To decide what type of mutual fund you should invest in, you have to first decide what you will use the money for, and when you might need to use it, and how much risk you are willing to take.
Remember this: all investments of any kind — whether real estate, insurance, pre-need, mutual funds, or even time deposits or government securities — have some kind of risk. In some cases, there is a chance that you may not get the kind of returns that you were hoping for. In other cases, there is a chance that you may not even get some or all of your original investment back. However, the chances of these kinds of things happening depend on several factors. To know more about the types and sources of risk in investments, visit this related blog.
You can be conservative or ambitious in your investments, depending on whether you have a small or large “appetite” for risk. Usually, the higher the risk, the higher is the expected return on investment; this kind is attractive to ambitious and aggressive investors. Or, stated the other way, if you are conservative and you don’t want too much risk, then you shouldn’t expect a very large return. How aggressive or conservative your investment should be depends on what your financial goals and timing are. To know more about the relationship of risk, goals, and timing, visit this related blog.
- If you are a conservative investor, you don’t want to take too much risk. The most prudent choice will be the Save and Learn Fixed-Income Fund (SALFIF).
- However, if you have ambitious financial goals, but you have plenty of time to wait, you may choose either of the two types:
- the Save and Learn Balanced Fund (SALBF) — if you have between 2 to 5 years before needing the funds; or
- the Save and Learn Equity Fund (SALEF) — if you will not need the funds for at least 5 years.