From the course: Helping Your Employees Meet Retirement Goals
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What’s in your plan? All about funds
From the course: Helping Your Employees Meet Retirement Goals
What’s in your plan? All about funds
- If you look into almost any company-sponsored retirement plan, you almost never see individual stocks or bonds. Instead, you'll find a wide range of investment products called funds. Now, these funds may have head-scratching names, like the VX Mid-Cap Growth 500 Fund, but the names are less important. What's critical is that you understand what's in them and how you can help your employees make decisions and put their retirement money to work. First, let's go over the two most common funds, mutual funds and exchange traded funds, or ETFs. On the surface, mutual funds and ETFs look the same. Each are packaged groups of stocks, bonds, or both. And both mutual funds and ETFs target a specific goal or purpose, picking a collection of investments in order to reach that goal. Balanced funds lower risk by holding both stocks and bonds. Growth funds take on a lot of risk in the hope of higher returns. International funds try to lower risk by spreading investments across different countries.…
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