What are the benefits of mutual funds over other types of investments?
When you buy the stock or bond of a company, your returns depend entirely on how well that company performs. But when you buy shares in a mutual fund, you are investing in the performance of a number of companies at the same time. That can help protect you from the ups and downs of one single company. Mutual funds are professionally managed. Portfolio managers search for securities they believe have the best potential to fulfil the fund’s objective. Individual investors rarely have the time or resources to research potential investments as thoroughly as mutual fund portfolio managers and their staff. Many mutual fund companies have large research departments whose function is to investigate and analyse potential investments and keep tabs on market trends. The third important benefit of mutual funds is liquidity. This means you can get your hands on your money in a relatively short time. Investments like Certificates of Deposit (CDs) tie up your money for a period of time, while money f
