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reasons. If you don't depose a great capital which you can miss for many years it is best that you don't consider buying individual shares but invest in mutual funds.

Mutual funds offer you to limit your risk according to your profile. You can invest in mutual funds which only invest in shares but there are also others which invest in certain stock indexes like the Dow Jones, the Euro Stoxx 50, the NASDAQ and some others; another possibility are those which invest in certain sectors by example energy, pharmacy, financial, materials etc. Diversifying in several kinds of mutual funds is the key to reach a good return!

There are also certain mutual funds which protect you for a part against some losses. You can buy mutual funds which invest in a mix of shares and bonds and determinate the percentage in each of them. In these you can choose the usual mix of them but also these with a safety that your loss can't be higher than a certain percentage. In my opinion the best choice you can do here is a mix of 50 % in shares and 50% in bonds and the safety risk is in this case mostly 10% which means that you can't lose more than 10% in one year and you will receive the maximum of the increase of the value of this fund.

Learn the techniques of diversifying your risk and you will be happy with the result of your investment; bankruptcy of a limited quantity of companies can't hurt you investment in general.

Learn more about this author, Erik Van Tongerloo.
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