Mutual funds for saving?

[Saul Arredondo]

Hello so I'm 23 years old and my plan is to invest in real estate small multi family properties As for now I'm am just saving up to be able to put in a down payment of 20% I have a friend who is suggesting I put my money in mutual funds while I save up. I'm just wondering what do you guys think about mutual funds? Are they a good investment? Is that a way I can save up for a down payment hoping i get some returns? Thank you

[Paul Allen]

Originally posted by @Saul Arredondo:

@Ned Carey thank you i will do research on them and yes it will be a short term maybe around a year or 2

 A mutual fund is just a collection of securities grouped together so that it can be sold as a single unit. A mutual fund might hold stocks, bonds, real estate, commodities, futures, options, cash, precious metals, etc.

If your time horizon is 2 years or less I do not recommend putting your money into anything other than cash instruments. Anything under 5 years is a short term investment. There is a high risk of losing money on short term investments. Your rate of return on a cash investment might be disappointing, but it won't be nearly as disappointing as having your savings decline in value.