Fetty wrote:

- quote -

Keep in mind, mutual funds carry no guarantee on return of principle.
While there are funds ranging from those investing in Goverment
securities (the safest) all the way to leveraged funds that buy tech
stocks (on the risky side), so you should first study to understand what
investment is right for you.

JOE

Thanks Dave


Dave Dodson wrote:
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In general, mutual funds don't pay interest -- they pay dividends. It
may seem like a fine point, but interest and dividends are subject to
different rules for figuring any income tax owed on them.

Some funds pay dividends monthly, and some pay quarterly, semiannually,
or annually. The dividends may be ordinary dividends, qualified
dividends, or capital gains distributions. These have different income
tax treatment.

You may take the dividends in cash, in which case they do not compound
at all, or you may reinvest the dividends. In this case, you buy
additional shares that in turn will earn dividends in the future. In a
sense, these would compound at whatever times the mutual fund pays
dividends. However, unlike a bond or certificate of deposit, mutual
fund dividends are not guaranteed as to amount.

Hope this helps.

Dave Dodson

Have a question about mutual funds and compound interest. In a mulual
fund the interest that is made on a mutual fund. Is it compounded
monthly, annually, or how does that work?


Dave