| Mutual funds have grown in popularity over the | | | | liquidity of mutual funds gives any investor the |
| last few years to the point where it's harder to | | | | ability to get out of the investment quickly if |
| find an investor who is not using mutual funds | | | | needed. |
| than one who is. The popularity of mutual funds is | | | | The third advantage of mutual funds is the |
| no surprise when you consider that they are one | | | | diversification that they offer. Mutual funds invest |
| of the easiest investments to use and require | | | | in tens or even hundreds of different stocks, |
| very little knowledge of the financial markets. | | | | bonds or money markets. Trying to duplicate this |
| There are 4 main advantages that mutual funds | | | | type of diversification in your own portfolio would |
| offer every investor, as you will learn in this | | | | result in very high trading fees, not to mention |
| article. | | | | huge headaches from tying to monitor hundreds |
| The first advantage of mutual fund investing it | | | | of stock positions. This leads us into the fourth |
| that mutual funds offer professional management | | | | advantage of mutual funds, lower fees. |
| of your investment dollars. Mutual funds are run | | | | Mutual funds have very low fees due to their |
| by fund managers, who are essentially watching | | | | ability to take advantage of economies of scale. |
| over your investment daily. There is almost no | | | | Since mutual funds are pooling the investment |
| other place where you get that kind of | | | | dollars of so many investors they can buy stocks |
| investment management without paying huge | | | | in larger quantities which leads to lower fees for |
| management fees. | | | | mutual funds investors. Numerous mutual funds |
| The second advantage of mutual fund investing is | | | | have fees that are under 2 or 3%. |
| that mutual funds are extremely liquid. Any | | | | Mutual funds are growing at a feverish pace as |
| investor can sell his shares in a mutual fund any | | | | more and more investors put their money in |
| day that the stock market is open. Compare that | | | | them. But considering the great advantages that |
| to investing in real estate, CDs or even stocks | | | | mutual funds offer the average investor all the |
| that have low trading volume which can takes | | | | way up to guy with the multi-million dollar portfolio, |
| weeks to months to liquidate your stake. The | | | | it's really no surprise. |