In This Chapter
Avoiding the tendency to predict (and the anxiety that comes with it)
Learning to relax and watch your investments grow over time
Experiencing the worries that I identify in this chapter is a sign that you're a normal person. But these concerns are also something I want you to overcome. When you do, you're well on your way to avoiding common painful and costly fund-investing blunders and oversights.
You have to start somewhere. People with less to invest actually benefit more from mutual funds than investors with heftier balances (although those investors benefit a lot as well). With just several hundred or a few thousand dollars to invest, you can't diversify well or avoid commissions that gobble a significant percentage of what you have to invest when you buy individual securities. By investing in mutual funds, you can invest efficiently.
If you invest money for the longer term, especially inside retirement accounts, start with a hybrid fund or a fund of funds. Some of these funds have low minimum initial investment requirements of $1,000, and they'll go even lower — $50 — if you sign up for an automatic investment plan that regularly makes electronic withdrawals from your bank account. (See the examples in Chapter 15.) Invest just $1,000 today in good mutual funds and add just $50 per month. With funds that average a 10 percent annual return, in 20 years you'll have about $44,000! Invest over ...