| Mutual funds are popular with many investors | | | | available from different investment firms and |
| mainly for the mere fact that, they have a set of | | | | online as well. When you look at the prospectus |
| advantages that they can identify with, which are | | | | that is offered by any mutual fund investing firm, |
| considerably better than those that one can enjoy | | | | you will get to see the outlined tasks and duties |
| in other types of investment securities. One of | | | | that are assigned to the manager, which would |
| the most appraised advantages is the fact that | | | | otherwise be left to the investor. |
| they are professionally managed by a fund | | | | Among the disadvantages that mutual funds are |
| manager on behalf of investors. An investor may | | | | open to include, high risks and costs. They are |
| not be able to do all that follow up on his own and | | | | normally more easily affected by changing market |
| as such, his investment would probably not | | | | conditions, more than other types of investment |
| survive the storms of the stock market. | | | | securities. The fluctuations in market conditions |
| Another advantage that comes with mutual funds | | | | cause the charges and fees payable to fluctuate |
| is convenience. Convenience in this aspect refers | | | | as well. However, when there are no storms in |
| to the ease with which one can trade in them. | | | | the market conditions, the tendency is for the |
| Buying, selling and changing distribution details or | | | | funds with high risk factor to attract high returns. |
| strategy are relatively easy tasks to carry out | | | | While mutual funds are popular and highly |
| when one is dealing with the funds. Changing of | | | | recommendable as far as returns are concerned, |
| the distribution details, also known as asset | | | | they have a disadvantage of being costly. They |
| allocation is a process that is open to execution | | | | come with loads of fees and charges that are |
| every once in a while, due to the fact that | | | | payable on a regular basis, some monthly and |
| description of different categories of the funds | | | | others annually. Other charges are imposed during |
| keep changing as the market conditions change. | | | | a transaction. For example, loaded funds must |
| This goes hand in hand with the advantage that | | | | incur a cost whether one is buying or selling |
| they are highly liquid. They trade on a daily basis | | | | shares. There is also normally a diversification |
| and in large quantities. | | | | penalty, chargeable whenever an investor wants |
| Obtaining information about mutual funds is also | | | | to diversify his investment in order to spread and |
| much easier than obtaining information on other | | | | reduce the risk that is characteristic of many |
| types of investment securities. The information is | | | | categories of these funds. |
| availed through a prospectus that are readily | | | | |