You've entered the investing world to make money, and there are two primary ways to do that: growth and income. Growth securities you buy today will be worth more tomorrow. Income securities will pay you interest or dividends at regular intervals right now. And there are funds designed for each, even for both.

Growth funds don't focus on the current price of a stock; rather, their concerns center on the sales and earnings of the company and the expectation that both will grow, which will cause the stock price to rise. The idea is not the traditional “buy low, sell high” principle; rather, it is “buy at whatever price and watch the company build momentum, get on a roll, and grow.” Growth investors seek out companies that have tremendous potential, based perhaps on new products, unique services, or excellent management. Long-term growth funds seek to capitalize on larger, steadily growing companies like Microsoft. Aggressive growth funds involve smaller companies that are taking off fast like Amazon.com.

Aggressive Growth Funds

Sometimes called capital appreciation funds, these are the funds that generate the most press. When they go well, they go very well. Some of these have produced tremendous results — but the opposite is also true. Investors should know that this volatile category can turn around very fast. Aggressive growth funds look for companies poised to grow in the short term, which is why they are riskier investments.

Income Funds

Income funds are best for investors who want to see results right away, in the form of steady income. These funds hold dividend-producing stocks and pass those dividends along to fund shareholders. Some of these funds may also hold interest-paying securities, like bonds; these earnings are also passed on to the fundholders. Even though that income is yours right away, you can choose to reinvest it rather than receiving a regular check. Be aware, though, that these earnings are taxed whether you take the cash payment or reinvest it.

Straight income funds are considered conservative by nature, seeking as their primary objective to pay you dividends from consistently well-performing companies. One of the nicest aspects of an income fund is that the companies that pay dividends, hence those in the portfolio, are usually not affected greatly by downturns in the market.

Combination Growth and Income Funds

You might also choose to go with a fund that specifically seeks out companies whose stock is not only expected to grow but also pays dividends. Such a fund provides steady income, which is attractive to anyone who likes to maintain cash flow even during major dips in the market. A growth and income fund can also work very well for an individual who may be retiring but still wants to have money in the market. Such a fund will provide cash toward living expenses while allowing the investor to maintain some capital.