fidelity mutual funds

[watsmubic]

Hi,

I am new to investing. I have decided to invest mostly in mutual funds for now. I have a fidelity account and want to keep things simple and relatively low risk. So, I am trying to decide whether to allocate 5K between my two funds that are doing well (fidelity canada and defense and aerospace) or find another one that is low risk, low cost, and high gain. Any tips? Reading prospectusi tend to confuse me a bit. So, I would love any recommendations from experience. I am looking for a stable long term investment with high interest yield.

Thanks

[mbhunter]

Without knowing anything else about you, we're guessing, but understanding a prospectus might be a start. If you want to consistently do better than average, you'll need to know more than average -- probably a lot more. But always key is not to invest in anything that you don't understand.

[Ima saver]

If you want something low risk and low cost, I would suggest Vanguard Star fund. It invests in several vanguard funds. I put my BIL in it about 10 years ago, and he has more than tripled his money.

[sweeps]

Originally Posted by watsmubic

I am new to investing. I have decided to invest mostly in mutual funds for now. I have a fidelity account and want to keep things simple and relatively low risk. So, I am trying to decide whether to allocate 5K between my two funds that are doing well (fidelity canada and defense and aerospace) or find another one that is low risk, low cost, and high gain. Any tips? Reading prospectusi tend to confuse me a bit. So, I would love any recommendations from experience. I am looking for a stable long term investment with high interest yield.

If you want simple and low risk, you'll want a diversified index fund.

Investing in a region-specific (e.g. Canada) or industry-specific (e.g. defense, aerospace) fund is the equivalent of swinging for the fences. You could turn your $5,000 into $25,000, but you could just as easily turn it into $1,000. If you can't invest the time in research (including reading and understanding the prospectuses), I would not recommend this option.

[Ima saver]

I agree with sweeps. I am invested in Vanguard Index 500, that is the top 500 stocks in the market.