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    Ask This About Best Growth Mutual Funds

    Investing in a growth mutual fund means you’ll be investing in a diverse portfolio of stocks designed to gain capital appreciation over time. These funds do not generally pay dividend payouts. Some investors are turned off by this, but many investors find the long-term payout to be worth the trade-off. These types of mutual funds are perfect for those who are not planning on retirement soon. Frequently, growth mutual funds multiply in value between the time they are purchased and the time they are sold, which is why even though they can be considered high-risk by some they are still very popular. If you are interested in a high-risk, high-reward investment, ask these questions about the best growth mutual funds to learn more.

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    What kind of stocks will I be investing in?
    When it comes to growth mutual fund, you will be investing in growth stocks. These growth stocks are in fairly young companies that are growing faster than most others.
    What's the main objective?
    The main objective of a growth mutual fund is to capitalize on the momentum of the stocks in your portfolio. This allows for a greater possibility of return more quickly but it comes with risks.
    What are the risks?
    The risks of growth mutual funds are that by capitalizing on expedited growth from a new company, there is a greater possibility that the market will counteract your strategy and cause you to lose profit.
    What are the advantages?
    Growth mutual funds offer a number of advantages. Growth mutual funds allow for active management, instant diversification, and low maintenance over a long period of time.
    Do I want lump-sum averaging or dollar-cost averaging?
    Lump-sum averaging or dollar-cost averaging are two of the most common investment methods available. With lump-sum averaging a large amount of money is invested in a short period of time. If you don't want to go that route, dollar-cost averaging will allow you to give a little over scheduled periods of time.
    What my time horizon?
    The time horizon is the amount of time you'll be investing. Inveting sooner will allow for more consistent growth over time and will involve less risk.
    Is the fund actively managed?
    An actively managed profile will be managed often over time. This may be a problem because there will be more fees for that service. This may be a problem because it cannot guarantee a better profit.
    What is the expense ratio?
    A greater expense ratio does not guarantee better performance like you might think. In general, lower expense ratios are more likely to guarantee a better performing growth mutual fund.
    What are the best growth mutual funds?
    Currently, the best growth mutual funds are Rowe Price Dividend Growth, Natixis Loomis Sayles Growth, and Russell US Defensive Equity.