What are the four types of mutual funds Dave Ramsey recommends? (2024)

What are the four types of mutual funds Dave Ramsey recommends?

That's why you should spread your investments equally across four types of mutual funds: growth and income, growth, aggressive growth, and international. That keeps your portfolio balanced and helps you minimize your risks against the stock market's ups and downs through diversification.

What are the 4 types of mutual funds Dave Ramsey recommends?

And to go one step further, we recommend dividing your mutual fund investments equally between four types of funds: growth and income, growth, aggressive growth, and international.

What are the 4 types of mutual funds?

What types of mutual funds are there? Most mutual funds fall into one of four main categories – money market funds, bond funds, stock funds, and target date funds. Each type has different features, risks, and rewards.

What are the main types of mutual funds quizlet?

  • growth funds. invest in stocks of companies whose businesses are growing rapidly. ...
  • income funds. ...
  • growth and income funds. ...
  • index funds. ...
  • balanced funds. ...
  • asset allocation funds. ...
  • Bond funds. ...
  • Tax free bond funds.

What are four types of investments that you should always avoid?

13 Toxic Investments You Should Avoid
  • Subprime Mortgages. ...
  • Annuities. ...
  • Penny Stocks. ...
  • High-Yield Bonds. ...
  • Private Placements. ...
  • Traditional Savings Accounts at Major Banks. ...
  • The Investment Your Neighbor Just Doubled His Money On. ...
  • The Lottery.

What are the different types of mutual funds?

Investors can choose from various types of mutual funds, such as stock funds, bond funds, money market funds, index funds, and target-date funds, each with its investment focus and strategy.

What is Dave's advice to investing in mutual funds?

A: Mutual funds are like the Swiss Army knife of investing — they diversify your risk across a bunch of investments. Dave likes them because they're reliable and stable over time. By staying invested for at least five years, you give these funds the time they need to show their true potential.

What are the four categories of mutual funds and percentages that Dave recommends?

That's why we recommend splitting your investments evenly (25% each) between four types of stock mutual funds: growth and income, growth, aggressive growth, and international.

Why does Dave Ramsey recommend mutual funds?

Lower Costs. Trading single stocks can get expensive because you can end up paying transaction fees for every single stock you buy and sell. Those fees add up really fast! Mutual funds, on the other hand, make it affordable to invest in a wide range of stocks without those pesky transaction fees.

Is it good to have 4 mutual funds?

Unless you are very well versed with the markets and have expert knowledge about mutual funds, a good rule of thumb would be to own: Large Cap Mutual Funds: Up to 2. Maybe 3 at best. Beyond that, it doesn't make sense as there will be a great overlap in the shares owned by your mutual funds.

What is the most common type of mutual fund?

Bond funds are the most common type of fixed-income mutual funds, where (as the name suggests) investors are paid a fixed amount back on their initial investment.

What is the most popular type of mutual fund?

Some of the most popular are:
  • Fixed Income Mutual Funds.
  • Money Market Mutual Funds.
  • No Load Mutual Funds.
  • Growth Stock Mutual Funds.
  • Tax Saving Mutual Funds.
  • Index Mutual Funds.
  • Gold Mutual Funds.
  • Socially Responsible Mutual Funds.

How many mutual fund categories are there?

– Under Equity category, Large, Mid and Small cap stocks have now been defined. – Balanced / Hybrid funds are further categorised into conservative hybrid fund, balanced hybrid fund and aggressive hybrid fund.

What investments never go down?

Money market accounts, certificates of deposit, cash management accounts and high yield savings accounts all carry FDIC insurance. Treasury bills, notes and bonds are backed by the U.S. government, making them another low-risk investment option.

What are the four most common types of investments?

There are many types of investments to choose from. Perhaps the most common are stocks, bonds, real estate, and ETFs/mutual funds.

What is the safest investment in a recession?

Treasury Bonds

Investors often gravitate toward Treasurys as a safe haven during recessions, as these are considered risk-free instruments. That's because they are backed by the U.S. government, which is deemed able to ensure that the principal and interest are repaid.

What are the 4 types of mutual funds in India?

Generally, mutual funds fall into one of four types: Equity Funds, Debt Funds, Money Market Funds, and Hybrid funds.

What are 3 types of funds?

The Generally Accepted Accounting Principles (GAAP) basis classification divides funds into three fund categories: governmental, proprietary, and fiduciary.

Which type of mutual fund is best for long term?

For long term investments, consider equity funds as they offer the potential for the best returns. Choosing a growth mutual fund option can help you achieve your long-term goals as your returns will grow through compounding over time.

What are best mutual funds for 2023?

Top 5 small cap mutual funds with highest returns
Top small cap mutual fundsAnnual Returns 2023
Bandhan Small Cap Fund49.48%
Franklin India Smaller Companies Fund49.44%
ITI Small Cap Fund48.54%
Quant Small Cap Fund44.90%
1 more row
Jan 3, 2024

Should I pull my money from mutual funds?

This decision solely depends on your goals as an investor. Investors can redeem mutual funds in order to liquidate cash for short term goals like buying a car, or going for a vacation or long term goals like investing in real estate, child's education/marriage, retirement, etc.

How do you smartly invest in mutual funds?

Here are 10 quick tips to determine if you are a smart investor-
  1. Start Early. ...
  2. Think long-term. ...
  3. Set your goals. ...
  4. Identify your risk appetite. ...
  5. Allocate your assets. ...
  6. Create an Emergency Fund. ...
  7. Plan Taxes. ...
  8. Invest via SIP.

Why does Dave Ramsey not like ETFs?

Constantly Trading

One of the biggest reasons Ramsey cautions investors about ETFs is that they are so easy to move in and out of. Unlike traditional mutual funds, which can only be bought or sold once per day, you can buy or sell an ETF on the open market just like an individual stock at any time the market is open.

What is the 4% rule for mutual funds?

The 4% rule is a popular retirement withdrawal strategy that suggests retirees can safely withdraw the amount equal to 4% of their savings during the year they retire and then adjust for inflation each subsequent year for 30 years.

What are the best mutual funds to invest in?

Summary: Best Mutual Funds
CompanyExpense RatioDividend Yield
Schwab U.S. Large-Cap Growth Index Fund (SWLGX)0.035%0.66%
Vanguard Mid-Cap Value Index Fund (VMVAX)0.07%2.31%
The Hartford Short Duration Fund (HSDIX)0.49%3.40%
Vanguard International Growth Fund (VWIGX)0.42%1.03%
6 more rows
Feb 1, 2024


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