Mutual fund? or CD?

ok, ive had a mutual fund for about 3 years now, and its made me about 400 dollars or so. the principle was 3900. now ive done my research and i could have made that much in a 36 month CD, and it would have been much safer. with the market getting rough these days. what do you think would be a better choice? CD, or Mutual Fund?

1. If your goal is long term (5yrs or more) a good mutual fund is almost always better than a CD.
2. The Vanguard Star fund - a balanced, moderately risk fund has averaged 11.69% for the last 3 years. In 2007 it is up 7.95%.
3. It could also have lost money since it is not as safe as a CD.
4. Look at Fidelity, Vanguard, T Rowe Price funds and their performance over 3, 5 or 10 years. Note the 5 year return is lower do to some bad years. Look at balance funds (have stocks and bonds).
5. So, for savings look at CD's or money markets
For investments look at mutual funds

If you go with CD- your sucess is limited. However, you went to Stock market for a search of potentials. Be glad that you at least did't have any looses. Learn on your mistakes and move on to a better mutual funds. Do no go to CD's-that is for a retired people who cannot offord to loose - you can.

Even mutual funds need careful selection and timing. If you buy at the top of the market you will not make much money for many years.

Experience has taught me that the best tactics is to keep your capital on deposit collecting 5-6% and wait for the stock market to have a good fall and then pile into index trackers.

Invest in MF: These funds are a type of security that can be traded on the stock market, allowing shareholders to buy and sell shares in the funds. The revenue generated by purchase of shares is used by mutual fund manager to buy more shares of specific stocks, bonds, and other market securities and money market instruments.
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Hello,

You are the only one that can fully answer this question since no one here knows your circumstances, risk tolerance, time horizon, objectives, etc. Also, what type of mutual fund are you referring to because the historical returns vary depending on the asset class and/or sector.

If you are referring to equity funds, then I would say that a mutual fund would be better choice because in my view the market as defined by the S&P 500 is not significantly overvalued. There are equities that I consider to be overvalued like small-cap value stocks and emerging merkets stocks.

I hope this helps.

Michael A. Weiss, CFA
The Editor
The Mutual Fund Investor
http://www.mutualfundinvestor.net