Opportunity Investing: How to Profit When Stocks Advance, Stocks Decline, Inflation Runs Rampant, Prices Fall, Oil Prices Hit the Roof, … and Every Time in Between

Chapter 3. Selecting Mutual Funds most likely to Succeed

Mutual funds, initiated during the 1920s, enable investors to invest in large and diverse portfolios of stocks, bonds, and often other investments (such as real estate and precious metals), with relatively small amounts of capital. In theory, for each share of a mutual fund that an investor purchases, he secures a portion of a portfolio of domestic and/or foreign stocks, bonds, or other investments (investment selections made by “trained” and “professional” managers, “experts” in their fields of investment).

Moreover, risks (and potential rewards) are at least theoretically reduced by the diversification inherent in broad mutual fund portfolios, and transaction costs are reduced by the relatively ...