Mutual Funds & How They Work

3. Reasons to Invest in Mutual Funds:


You will gain direct access to hundreds of stocks and bonds offering you added diversification, which individual securities lack, not to mention their volatility. The more options you have, the greater the chance for gain.

They allow you to invest in the market whether you believe in active portfolio management (actively managed funds) or you prefer to buy a segment of the market with no interference from a manager (passive funds and index mutual funds.)

Usually, they have low minimum initial contributions. Some companies allow you to start investing with as little as $100. But some may require at least $1,000. But at these rates, if you’re not in the market…You should be.

They present automatic reinvestment to ensure you’re capitalizing on your gains as you receive them, and most companies don’t charge sales loads.

They offer transparency so you can view your holdings daily, to monitor that you are getting what your pay for, or at least check its activity changes.

Mutual Funds are liquid so if you decide to sell, your money will be available to you the next day.

They are all armed with audited tracking which offers the investors reassurance that all returns posted are accurate.

Even if the company goes out of business, the fund shareholders will receive an amount of cash equal to their portion of ownership in the fund. So you can begin investing again with ease in a safe investment!