Should an investor invest in mutual funds? / What are the benefits of investing in Mutual funds?
Yes! An Investor should invest some part of his investment portfolio in mutual funds. In fact some investors may be better off by putting their entire portfolio in mutual funds. This is on account of the following reasons: 1. On their own, uninformed investors could perform much worse than mutual funds. This is due to lack of professional expertise. Mutual fund managers are well informed on market news and happenings and base their decisions on in-depth analysis and research of individual companies before investing in a particular company. Remember that this is their full time job! If you want to invest directly in the stock market and earn superior returns to a mutual fund, you must have knowledge, resources and professional management. 2. Diversification of risks, which is difficult for an investor to achieve with the small amount of funds at his disposal. You’re not putting all your eggs in one basket, i.e. in a single share or one loan product, you get the benefit of diversificatio
