| The real life game of investing is played at many | | | | lot less capital to get started investing. Some |
| levels. High risk brings with it high returns. Less risk | | | | mutual funds may require a minimum of $100 to |
| and the returns are reduced. The popular | | | | get you started. Because investors pool their |
| investment arena that we call the stock market is | | | | money together to purchase stocks and bonds, |
| a field where investors win and lose, depending on | | | | the trading cost is lower and the diversification is |
| their strategies. In this big and competitive | | | | greater. |
| playground, it is smart to look for alternatives | | | | Diversification is the best safety net for your |
| that can give you good returns with the lowest | | | | money. Since you are investing in several stocks |
| risk possible. Diversifying your portfolio is a smart | | | | and bonds under one fund; if one investment is |
| way to start and mutual funds may be the | | | | down, another might perform well. This is a great |
| answer. | | | | protective umbrella as opposed to investing in a |
| With a mutual fund as a financial tool to invest | | | | particular stock that may perform poorly, thereby |
| your money, you are reducing the risk your | | | | costing you your investment money. The amount |
| investment is exposed to. A group of investors | | | | of risk is greatly reduced with this type of |
| pool their money, investing in a high earning stock | | | | investment. |
| and bond market at the same time that the | | | | Because a fund manager has already chosen the |
| portfolio is being diversified. This strategy | | | | investments, you will save time and money as |
| minimizes risk. In addition, a fund manager | | | | opposed to choosing the stocks yourself in an |
| manages the pooled money or fund. The fund | | | | attempt to diversify your portfolio. Investing in |
| manager has expertise in the stock and bonds | | | | several mutual funds will give you instant |
| market. His responsibility with the fund is to | | | | diversification and investors, instead of the |
| manage it by investing in securities that will yield | | | | individual stocks/bonds, share the risk. |
| the highest return. | | | | A well-managed mutual fund can be the answer |
| Compared to stocks, the mutual fund is a safer | | | | to a portfolio that gives you higher returns and |
| way to invest and diversify. Since an expert is | | | | lower risk. For unsophisticated investors with little |
| managing the fund, that responsibility is taken out | | | | experience, this is one of the safest ways to |
| of your hands. Buying into mutual funds requires a | | | | invest. |