What are the potential advantages of investing in mutual funds?
There are many reasons why people invest in mutual funds: • Diversification: Investing in a number of different securities helps reduce the risk of investing. When you buy a mutual fund, you are buying an interest in a portfolio of dozens of different securities, giving you instant diversification, at least within the type of securities held by the fund. • Affordability: With many mutual funds, you can begin buying units with a relatively small amount of money (e.g., $500 for the initial purchase). Some mutual funds also let you buy more units on a regular basis with even smaller installments (e.g., $50 per month). • Professional Management: Mutual funds are managed by professionals who are experienced in investing money and who have the skills and resources to research many different investment opportunities. • Liquidity: Units or shares of mutual funds can be redeemed at any time at the NAVPS of the fund. • Flexibility: Many mutual fund companies administer several different mutual f
