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Who Invests in Conservative Mutual Funds?

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Who Invests in Conservative Mutual Funds?

Every type of investment has a degree of risk. If you have a high tolerance for risk, you are willing to take more risk to get higher returns. If you have low risk tolerance or are risk-averse, you are not. Conservative mutual funds are popular among the risk-averse.

Things To Know

  • Conservative mutual funds are popular among the risk-averse.

Who buys them

Conservative funds are also popular among investors looking to earn current income and conserve their principal. These might be retired individuals, persons trying to achieve financial stability or financial independence, or people who want to pay off current bills and debts.

For individuals with a short investment time horizon, conservative mutual funds are also popular. Because conservative mutual funds focus on producing current income while maintaining principal, investors may not see dramatic growth in them over the long term. But neither will these funds be as vulnerable to dramatic drops in value for the short term.