Learn to invest money – with funds

If you want to learn to invest money the first thing you should know is that it is not as hard as you might think. In addition you’ll also be pleased to know that it may require much less money than you initially feared to get yourself started making successful investments.One of most important things to learn before investing is to not take too much risk. A great way to do this is to select to invest in a managed fund. By doing so you are effectively outsourcing the specialist role of smart stock investing or picking or investment appraisal to an experienced professional. In addition by investing in a fund allows to quickly diversify your investment portfolio. If you have say $500 to invest you could opt to buy some stock in a company such as Apple. Assuming the price rises this could be a great investment however if the stock falls in value by 50% your investment will only be worth $250. By contrast if you had invested in an investment fund that aims to track the S and P index of shares, the effect on your investment of Apples poor performance will be diluted as in reality your $500 will be invested in all of the shares in the index. This effect is called portfolio diversification.Traditionally investing in funds has required large lump sum investments, however the emergence of Exchange Traded Funds (ETFs) has meant small scale investors can invest in such funds using relatively small amounts of money. ETFs are funds that are traded in much the same way as stocks are.