Here are three good reasons why your money is best invested in mutual funds

 

Don’t just let it sit!

Finance gurus around the world will tell you that it is best to invest your money in some place where there is a chance of it growing. Saving money or parking it in a saving account at a bank makes it sit and over a period of time, there is a devaluation in the currency.

A lot of people around the world have suddenly woken up to mutual funds as a viable proposition as an investment. In the same breath, it is noteworthy that a lot of the people and a big chunk of mutual fund investors do not understand the positive implications that investing in mutual funds brings. Here are three great reasons why you must think in investing in them the moment you start making money.

  1. Diversification:

Let us see this one with a small example. Say Mr. A has $X to invest in a company that is doing average at the stock exchange. Now when Mr. A invests his money in the said company and the company does not do well, A has to bear the brunt of it. Now, if the same Mr. A has invested the Same $X amount in a mutual fund, the company would have split his investment and invested in a lot of companies across the sector.

It is quite possible that not all the companies will perform well at the same time. So, the loss that a few companies make is set loss automatically with the companies that have done well. this precise benefit draws a lot of people towards investing in mutual funds.

  1. Professionally managed funds:

As far as money matters are concerned, a lot of people either do not have the time and the energy nor the aptitude and the proficiency to manage their own portfolio. In this scenario, a portfolio manager who manages the person’s investment and is able to invest the money in different companies and decides when to sell and buy in order to make a profit is one of the best things to happen. A portfolio manager in a mutual funds company in charge of the client’s investment will take a call to buy or sell the shares of the company that he has invested the client’s money.

  1. There is something for everyone:

Mutual funds are not like a savings account or a current account in a bank where one size fits all. On the contrary, there is a variety of mutual funds to choose from the basket.

  1. A young professional will choose equity mutual funds because the savings are often regular. Equity mutual funds are more risk-friendly and the returns are commiserating high.
  2. A balanced mutual fund: this mutual fund balances a person’ risks and also keeps the returns of such funds on a positive keynote. This one is a combination of stocks and bonds.
  3. Bond fund: a person who is closing in on retirement can definitely not care too much for risks and hope t build up a robust portfolio. The bond fund is easiest to buy and sell and thereby also causing fewer hassles in acquiring and disposal.

 

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