The Extensive Advantages of Mutual Funds
Mutual funds represent one of the most popular investment solutions among the US investors. Here are some of the many reasons why they represent a preferred parking place for investors' money.
Since mutual funds invest in a variety of securities the risk of sustaining great losses due to a decrease in the price of a particular share is significantly decreased, because it is compensated by an increase in another share. By participating in a mutual fund you become an owner of just one security, but at the same time enjoy the positive effects of diversification.
- Professional Investment Management
Mutual funds provide their investors with professional management services. Since the compensation of the fund manager depends on the performance of the mutual fund, s/he strives for the best results on behalf of the investors.
- Recordkeeping and Regular Reports
By participating in a mutual fund your work regarding recordkeeping is greatly facilitated since mutual funds provide you with confirmation of transactions executed and the corresponding tax forms. Also, you can enjoy the wide availability of information on your mutual fund performance. Companies are required to send their investors regular reports and you can view the NAV of your mutual fund on newspapers or online sources.
- Online Services
Mutual fund companies provide many online services, which allow for convenient access to financial information.
- Investment Easiness
Investing in a mutual fund is easy since you can conduct your activities by phone, over the Internet. mail or bank wire. Additionally, the possibility of making automatic monthly investments from your checking account is also provided.
- Quick and Personalized Service
You can quickly and easily make your investment choices through the extensive websites of the mutual fund companies. By calling your advisor you can make personalized investing decisions and benefit from gaining information on the status of your account.
- High Liquidity and Easy Withdrawals
Whenever you need your money you can withdraw them and use them for your immediate needs. If you need money on monthly basis to be retrieved form your account, you can arrange with your mutual fund company the sending of checks from your acquired income or even from the principal.
- Low Cost
By embarking on establishing your own portfolio of investments you will incur many commission fees that will decrease the amount of money you can invest. On the other hand, mutual funds charge a small fee for the service of creating the diversified portfolio you need. There are even no load mutual funds on which there is no sales charge.
- Dividend Options
Mutual funds give you the opportunity of either taking your dividends in cash or reinvesting them. Money from acquired dividends can be automatically swept to your money market.
- Automatic Direct Deposit
If you have any other source of income, you can arrange with your mutual fund company the possibility of directly depositing them into your account.
- Asset Management Accounts
Many mutual fund companies allow for the payment of such financial needs as check writing, automatic bill paying and credit card services through the opening of such accounts.
You don't have to keep stock certificates in safe deposit boxes since the mutual fund maintains your account on its books and keeps track of your transactions. Then it sends you periodically the corresponding statements.
- Adjustments to Your Way of Life
Since throughout your life you constantly experience changes in your lifestyle mutual funds allow for the making the appropriate adjustments. You can plan for your children's education tuition fees or make the necessary steps for the provision of your retirement years.
- Market Cycle Planning
You can adjust your portfolio of investments according to the market conditions when you have invested in a mutual fund.
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