5 Benefits Of Investing in The Mutual Funds

March 19, 2015 Posted by admin

Mutual funds have been here since decades and have gone from strength to strength. Their popularity and longevity means that there are many solid reasons for making investment in them. Here we are looking at five important reasons.

1. Diversification of funds. This is the most important reason for many people who use mutual funds. There is no need for you to make huge investment to achieve diversification. With just small investment you a have access to bonds, shares, property and the fixed interest.

2. Automatic fund transfer. You can easily set an automatic fund transfer through the fund company. You can do this for as small as $100 every month which shows that you may not need huge money to get automatic transactions.

3. Funds are professionally managed. All the complicated research on money markets is done by experienced people. This is actually their job and they make on the spot decision in case of market turmoil. These managers have access to all the important market information which normal people are not privy to. They also have access to global managers and resources which many of us don’t have.

4. Dollar cost averaging. This strategy involves making investment regularly over some specific period of time. In this way you purchase more units when their prices are down and much lesser units when are prices are on higher side. The main aim of this strategy is to somehow lower the average per unit cost, thus giving you much lover cost for units which are purchased over a period of time. This is best strategy for the volatile markets. When market move downwards, you can celebrate! Because now you can purchase more units!

5. Easy liquidity. Normally you can get your funds within one week or even less. This is very advantageous in case of emergencies when you may need money at a short notice.

Though there are many critics of mutual funds, yet this method of polling of money for investment has several benefits, particularly for small investors having very limited resources.

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