To reach your investment goals, you want to hold the right mix of assets.
First, you want to stay diversified, avoiding the "eggs in one basket" situation. Second, you want the right asset combo for you.
Nearing retirement? You should probably mostly hold safe, income-generating assets with low risk--government bonds and a small percentage of equities. Got a long time to go in the money-making phase of your career? You can afford to take some risks. That bet on loads of small cap stocks seems much tastier when you're 25 than when you're 65. Time bails out a lot of investing mistakes. (Small companies grow faster than big ones over time, but are volatile in the short-run.)
A mutual fund advisory program helps set those ideal asset mixes. You let your advisor know what asset allocation makes the most sense for you. Then they put together a combo of mutual funds to achieve that predetermined mix.
It's like a barista at Starbucks...only in this case, the person helps you get the perfect mix of mutual funds, rather than the perfect mix of coffee, caramel flavor, and foam.
Related or Semi-related Video
Finance: What is Capital Appreciation (M...10411 Views
Finance a la shmoop what is capital appreciation as in the sense of an
investment fund or a mutual fund you know that is like what does it mean to
have a mutual fund with a focus on capital appreciation all right people
think more, more assets all right you have capital and yes you [Woman with a vault full of money]
appreciate having that capital but you'd appreciate it more if there was more of
it like it appreciated so a capital appreciation fund is one which focuses
on just growing the assets bigger and bigger don't really care how the capital
gets grown don't necessarily need dividends don't necessarily need minimum
p/e ratios don't necessarily need balance sheet covenants on the
investments you make don't care if it's exposed to the Venezuelan oil companies [Venezuela city landscape]
or the Australian dollar in a cap app fund well you just want the dough to [Money falls into flower pot]
grow and this ethos is in contrast to other flavors of funds which for example
need to throw off cash in the form of dividends like in a growth and income
fund or interest like in a bond fund like you know it's cash people need to
live on right so those have to do a capital appreciation does not so what's
a typical investment in a capital appreciation fund well usually be
something like a mega trend tech stock that just grows or appreciates with time [Man typing on laptop]
and really doesn't throw off much if any of a dividend like Amazon, Netflix
Facebook, Google those guys so think of a capital appreciation fund is the body [Man wearing underpants in a locker room]
builder of the mutual fund world it just wants to grow everywhere
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