The words Financial Planning and Financial Advisor make no claims.
Tolerating Risk
Nearly all mutual fund shareholders acknowledge that investing in equity or bond mutual funds involves some degree of risk. About half of shareholders say they are willing to assume average risk for average potential gain, and 35% are willing to accept above-average risk for above-average potential gain.1The actions of mutual fund shareholders would seem to validate their willingness to tolerate risk in order to reach financial goals: 80% own equity funds, which are generally considered the riskiest type of fund, considerably more than the 49% of shareholders who own less–risky money market funds.2Whether you are a conservative investor or an aggressive one, it’s likely there are mutual funds that match your risk tolerance. Fund to Fit YouInvestors with a long time horizon who are willing to accept more risk in pursuit of greater return potential may want to consider equity mutual funds, which typically invest in a portfolio of stocks that pursue the funds’ stated objectives.Investors who have a shorter time horizon and less appetite for risk may prefer bond mutual funds, which purchase debt issued by corporations and governments. This type of mutual fund is generally considered less volatile than an equity fund, provided that the fund manager trades bonds rated investment grade or higher. Bond funds are subject to the same inflation, interest–rate, and credit risks associated with the underlying bonds in the fund.For investors who have cash they will need in the short term, a money market mutual fund may be more appropriate. This type of fund typically invests in short–term debt instruments and is considered among the least volatile. Money market funds are neither insured nor guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although a money market fund attempts to maintain a stable $1 share price, you can lose money by investing in a fund.Mutual funds are sold only by prospectus. Please consider the investment objectives, risks, charges, and expenses carefully before investing. The prospectus, which contains this and other information about the investment company, can be obtained from your financial professional. Be sure to read the prospectus carefully before deciding whether to invest.1–2) Investment Company Institute, 2006Principal Financial Group print this page 11100 Wayzata Blvd, Suite 161•Minnetonka, MN•55305Phone: (952) 277-4259Toll Free: 800 626 7095•Fax: (952) 277-4301www.joeswanson.com•swanson.joe@principal.com PLEASE NOTE: The information being provided is strictly as a courtesy. When you link to any of these web-sites provided here, you are leaving this site. Princor makes no representation as to the completeness or accuracy of information provided at these sites. Nor is the company liable for any direct or indirect technical or system issues or any consequences arising Joe Swanson is licensed in Minnesota, Wisconsin, Oregon, and Ohio (additional states can be made available) to offer insurance products, and life insurance (including variable life), annuities (including variable annuities), securities and if applicable - investment advice. This site is not a solicitation of interest in any of these products in any other state. IMPORTANT CONSUMER INFORMATION: Joe Swanson may only transact business in a particular state after licensure or satisfying qualifications requirements of that state, or only if (s)he is excluded or exempted from the state's registration requirements. Follow-up, individualized responses to consumers in a particular state by Joe Swanson that involve either the effecting or attempting to effect transactions in securities or the rendering of personalized investment advice for compensation, as the case may be, shall not be made without first complying with the state's requirements, or pursuant to an applicable state exemption or exclusion. For information concerning the licensure status or disciplinary history of a broker-dealer, investment advisor, BD agent or IA representative or any financial institution (s)he represents, contact your state securities law administrator. Principal Life Insurance Company, Des Moines, IA 50392. Principal Life maintains certificates of authority to transact insurance in all 50 states. Its NAIC identification number is 61271.The words Financial Planning and Financial Advisor make no claims. Please see form ADV for disclosures. 401k plans and quotes are intended for Minnesota only and may be administered by other vendors including Fidelity, John Hancock, Principal Life, Nationwide Bisys, American
