Retirement: Mutual Funds, Bonds, and other ways to risk your money.

oh yea - I'm tackeling it. I will attempt to sort through my latest reading, though I can't promise a complete picture as of now! It seems like the more I learn the more unsure I am about what I should invest in for my retirement...which is definitely not what I intended.

A short recap of what I've learned:

Mutual Funds
By buying one, I am agreeing to let someone else decide which specific stocks to invest in AND paying that person to do it.  Now, there are pros and cons to this.
Pros: you can blame someone else when your portfolio decreases in value, you can rely on someone else to make pretty important decisions
Cons: smart, intellectual stock martket gurus can't truely predict the market either.

I will definitely put money into mutual funds because I feel like my knowledge about different markets and companies is not up to par...and I have paranoia/stress issues....it's best if someone else worries about the market. Though I'm sure this thinking is not fool proof!

As long as I pick a mutual fund with no loads, and VERY low commission ... and in a perfect world I will also check out the bio of the person in charge of the MF. Generally, if they have been the manager for over 4 years, they're 30+ and successful, I'm happy! But hey, I'm still learning!

There are lots more things to look at regarding mutual funds, and so I will revisit when I'm done with my first book =)

Bonds
I will also add these to my retirement fund. Why? because yes, diversification is key, but ALSO because they are a lot more safe than stocks! and having mentioned earlier that I can get quite paranoid, I think I like this option..depending on what I choose. Also keeping in mind, that when saving for the long term, anything gaining under 4% interest may not be as beneficial as you think, since the average inflation rate is at around 3% or so I've been told. So bottom line, you probably can't rely completely on bonds. =(

So yea, I've pretty much summerized my opinions here. No actual data to help make better decisions - will need to work on that!! I will start including actual research soon. But now that some of my thoughts are on paper, it will be easier to move forward!!

and we'll address the whole other ways to risk your money...