Mutual Funds

[sweeps]

Re: Mutual Funds

Isn't a fund that focuses on large company stocks a "concentrated sector" fund?

[trainedmonkey]

Re: Mutual Funds

Isn't a fund that focuses on large company stocks a "concentrated sector" fund?

Yes and no. A large company stock fund will concentrate on Large Company's with a huge market cap. While these funds invest in Large Company stocks, those stocks can span multiple vertical sectors (health care, energy, tech, financials, etc).

When the market does poorly in one sector it can impact the performance of a Large Company fund but hopefully not every sector of the economy will be in downward momentum. As a result a down tick in Tech and a up tick in Energy offset each other.

If you have tons of money you could invest in specific sectors and manage them yourself but I leave that to the experts. Otherwise if you concentrate in one sector of the economy you don't get exposure to sectors that go up while yours is going down.

Starting out any investor should concentrate on core holdings based on market cap instead within specific vertical sectors. After you establish yourself then you can take gains in those broad market funds and buy sectors that have been beaten up and are good long term investments. Me I consider Health Care (we're all getting older) and Financials (we all got money somewhere or at least thinking about it) to be pretty interesting.

[Frugal Father (tm)]

Re: Mutual Funds

Ings funds carry a load, in other words they charge you for lot of stuff, try T.Rowe price they are always rated well by morningstar and are a no load fund family.We have done well with T.Rowe. Still any fund family you pick go with no loads and cut your costs.