Did i do the right thing by getting a mutual fund for 10yrs with American Capital Income Builder?

Question

Im 22 yrs old and i invested 3k into this fund. Did i do the right thing if i want to make money?

Answer 1

It's not a bad choice of mutual fund. In the past 5 years, the fund's performance tracks SP500 nicely: http://finance.yahoo.com/q/bc?s=CAIBX&t=...

Answer 2

You are already invested so just keep an eye on it.

Answer 3

That is a good beginning.  Now every year add another 3k to the fund.

Answer 4

At your young age, a growth fund would be the choice of most people who advise in investments.  Usually, a retiree is the investor looking for income from their investments.  I am not that pleased with the choice. But, right now you may be O.K.   Of course, you can invest additional money into an investment.  I would consider growth at your age.  Really think that is an almost universal view. Remember, you will pay taxes on the income.  Unless it is inside an IRA or non-taxed vehicle. And I am sure your income will increase as you get your career kick started!

Answer 5

Why ten years?  Is there a 10 year early redemption fee?

Are you asking if this is a scam?  No, it's a legitimate investment.

If you bought this through a broker, whose advice you value and who gives good service, then don't worry about the fees.  The broker is doing work and is entitled to be paid.  If, however, you picked this on your own, you could buy similar Vanguard funds direct from Vanguard with lower expenses and no broker commission or fees.

Answer 6

What do you mean "for 10 years"?

Answer 7

Morningstar says;

Performance has been solid. It lands in the top half of the world-allocation category for the trailing three-, five-, and 10-year periods. In 2007, the fund beat 70% of its peers, though its large-value stock orientation could have tripped it up in a year when all different types of big financial stocks ran into trouble as a result of the subprime-mortgage crisis.

You're off to a great start!  The only negative is the high commission to buy this fund (3k = $172.50, I'm assuming you bought class "A".... if you were sold class "B"... run away from this financial advisor).

Over a lifetime you'll be paying a lot in commisions (every $100,000 invested will cost you $5,750).

You may want to learn about no sales commision funds (no-load).................... Read;

Mutual Funds for Dummy's.......

The American Funds are great..... but you can buy other good funds without paying high commissions.

One other thing: If this was sold to you inside an "annuity".... consider yourself ripped off.

Answer 8

Over its 20-year lifetime so far, that fund has averaged 10.82% per annum growth; assuming you chose to reinvest all your dividends, you can reasonably expect your $3,000 to grow into something between $280,000 & $680,000 by the time you retire.  If you add $40 a week to it, you'll be a millionaire before you are 50.

Yes, you did the right thing...

And yes, what DO you mean, "for 10 years"?