Mutual funds 4wise’ investment
Financial consultant says graduates should consider investments
By Julie Naughton
Senior Reporter_
Graduating seniors interested in
the investment market should con
sider mutual funds, said Craig Hundt,
financial consultant for the invest
ment firm of Shearscn Lehman Hut
ton, 206 S. 13th St.
Although equities offer the high
est rate of return, he said, the safest
bet for recent graduates are mutual
funds. Mutual funds require a rela
tively low investment and offer di
versification and professional man
agement, Hundt said.
Recent graduates also should keep
about three months of “emergency
money” in a savings account, Hundt
said. Once a student has that amount
of money in savings, he or she should
consider putting money in other types
of investments that yield higher than
regular saving accounts.
A graduate’s minimum investment
at a larger investment firm would be
about $500, Hundt said, because there
is a high cost for the investment firm
involved.
“It used to be, in the early days,
that you could buy 10 shares of this or
15 shares of that,” Hundt said. “The
market is no longer like that.”
The minimum number of shares
has gone up, and the price of doing
business has gone up T .undl explained
“The cost of trading won’t allow a
major firm to do small trades,” he
said. “For that reason, most major
firms, including Shearson, cannot open
an account with an investment of less
than $500.”
Hundt said both the major firms
and discount brokerage houses re
quire an investment of about $500.
Unlike investment houses, discount
brokerages will buy stocks, but the
customers must do his or her own
research. In a full-service investment
-4 4
If you 're going to be
a serious investor,
you will lose money.
• . . But you must be
willing to stick with
it.
Hundt
financial consultant
•-f f
firm such as Shcarson Lehman Hut
ton, an investment consultant will
take care of these matters.
Hundt said the minimum ticket
price for a full-service investment
firms is about $50 while the mini
mum ticket price for a discount bro
kerage is about $35.
The accounts that offer the best
yields, Hundt said, are foreign closed
end trusts. For instance, one called
the Mexico fund yielded more than
400 percent of the original invest
ment over four years.
However, Hundt said these trusts
are not the safest place for a new
graduate to place his or her money.
Mutual funds, he said, are much safer.
Hundt said that in the last 10 years,
the top mutual funds have averaged a
rate of return of 20 percent or more.
However, he warns, this rate is not a
guaranteed one for the future.
Another wise investment for gradu
ating seniors, Hundt said, would be
certificates of deposit, or CDs. He
said CDs can be short- or long-term
investments.
“Major league” growth funds -
proven, name-brand funds — usually
require a minimum investment of $500
and contin ued deposits. These depos
its can range from $50 to $500 or
more, Hundt said.
“A disciplined graduate could open
an account and put in $200 each month.
That would be an optimal investment
situation,” he said.
But, Hundt said, graduates must
have patience to put money in invest
ment securities.
“The key is discipline,” Hundt
said. “Most people don’t have the
patience. They put money in, and
when they see that the market is clown,
they pull their money out. But if the
market is up, they don’t get out and
take their profit.”
Hundt said experience is the best
teacher.
“If you’re going to be a serious
investor, you will lose money. I’ve
lost my own money in the market.
But you must be willing to stick with
it.”
Campus Notes
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Decisions
Continued from Page 6
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