What is the best way to invest $10,000? If this is something that you really want to know, know that there are plenty of ways in which you can invest this money. First, you have to determine how long you want to sit on this money. When do you want to see a return? You know that the faster you want to see a return the higher the risk that you are dealing with.

So let's say you want to sit on this money for 5 years. You can take your money and put it in a growth stock mutual fund. These may include international, aggressive growth, stable, etc. There are several different kinds. You just have to make sure that what you are investing in are stock mutual funds. Now, if you can't leave your money alone for a period of 5 years, then you may need to consider a CD or a bond.

But if you do plan on leaving it alone and you plan on investing in growth stock mutual funds, you will find that the risk to return ratio is quite amazing. You could make more in individual stocks, but you have to determine if the risk is worth it. But with stock mutual funds, the risk to return ratio is what you want to focus on. In the end, you may net more money due to the fact that the risk is lower.

So if you're wondering how to invest your money, this is a great way to go about that. So go ahead and invest and have a great time doing it. You might be quite pleased.

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I've been looking at a couple of growth funds, as well as some no-load funds to get started. Since I don't have a lot of capital to invest at the beginning here, I figured that these types of funds would be my best bet. They'll allow me to diversify my portfolio to an extent that wouldn't be possible if I simply bought stocks on my own, and this will of course protect me from short-term market fluctuations. By using mutual fund ratings to identify good investment opportunities, I'm giving myself an excellent head start.

Mutual fund reviews can come from a variety of sources, including financial journals, investment magazines, and the Internet. Since I don't have much experience with the stock market, I've been sticking to trusted names for my information, such as The Wall Street Journal, Forbes, Fortune, Kiplinger's Personal Finance, and Money. All of these publications regularly feature comprehensive mutual fund ratings, and I can even access recent archives by visiting their respective websites.

I've also found a number of independent websites that publish their own ratings, but I'm a lot more wary of following any advice from these places. After all, sometimes it's hard to tell if a particular site is part of a class project for a 19-year-old college student or if it's actually run by people who know what they're doing. The last thing I need is to follow terrible advice and lose all my money!

I know that fund ratings are only the beginning, and even funds that score the highest in these reviews carry a certain amount of risk. But by reading as much as I can about these investments before putting my money in, I'll be in a better position to assess the risk vs. reward ratio and will be able to make smarter decisions that will hopefully pay off in the form of a nice, big retirement account that will sustain me through my golden years.

If you're in the same boat and want to start planning for a secure future, I recommend that you review fund ratings from trusted sources before you invest your hard-earned dollars. The extra research will be worth it!

Chris Jonas is a chef working in Soho, New York.

Check out these great Mutual Fund reviews and articles or the more specific Mutual Funds Comparisons articles and resources.

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First off, why should you invest in mutual funds? Mutual funds are helpful for those who have limited time and resources, and would prefer to leave the management of their money to someone else. Mutual fund managers offer the expertise to invest in highly specialized areas such as international equities, and may thus be attractive if you would like to gain exposure to these markets without having to do the legwork yourself.

With such a wide array of mutual funds, choosing among them can be difficult. Nonetheless, there are three major criteria you should use to evaluate any mutual fund: the mutual fund's investment objectives, investment track record, and the mutual fund's expenses.

Mutual Fund Objectives

Choose mutual funds based on whether you are comfortable with their investment objectives. Different mutual funds have different investment objectives: growth, value, income, international exposure, contrarian investing. These will dictate the type of strategies followed by the fund - are the fund managers value investors? Or do they invest primarily for growth? Other funds adopt a strictly contrarian approach.

Extreme investment objectives naturally lead to more risky investment strategies - these are specifically the type of mutual funds you should be careful about investing in.

One indicator you should become familiar with is the Sharpe ratio. The Sharpe Ratio compares performance to fund volatility and is a good measure of risk. The lower the ratio, the better. The Sharpe Ratio is a very important measure of the level of risk you would expose yourself to.

Mutual Fund Performance

While past performance does not necessarily imply future success, it is nonetheless an important indicator. Compare the mutual fund's performance to the overall market and sector performance. Note that more than 70 percent of all mutual funds underperform, so scrutinize the performance figures carefully. What is the time span, what did the fund compare itself against, and what is the mode of comparison?

Mutual Fund Expenses
The third major factor you should carefully evaluate is the mutual fund's expenses. Look at the expense ratio. This ratio sums up all the costs of investing in the fund, which typically include the management costs, 12-b-1-, operating costs, loads and other miscellaneous costs.

For specific information on each mutual fund and to retrieve the different ratios mentioned above, Yahoo Finance and Morningstar are my personal favorites.

Yuen is a financial expert, personal finance specialist and motivational speaker who writes for the Financial Freedom Guide and other major financial blogs. His writing emphasizes financial independence and the creation of long term residual income streams. Learn how to emulate his success at Site Build It Reviews.

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