| Collective investment scheme that pools money | | | | account directly. Similarly money can be debited |
| from many investors and invests typically in | | | | directly from your bank account and invested |
| securities is known as mutual funds. Securities | | | | directly. There are lots of companies which allow |
| include bonds, commodities such as precious | | | | investors to invest as low as $50 per month. The |
| metal, infrastructure, stocks and short-term | | | | dividends and capital gains can be reinvested |
| money market instruments, managed by a fund | | | | without any extra fees. The funds are considered |
| manager who buys and sells the securities. Hence | | | | to be liquid asset, as the day you sell, the very |
| it is important to understand the investment | | | | next day the proceeds are made available. You |
| structure so that you can decide which one is the | | | | can see the audited track records of a fund |
| best option for you. There are plethora of | | | | investment company. |
| investment scheme options in the market. | | | | However, it is very important to read the entire |
| Some of the advantages of investing are as | | | | prospectus. It may have legal terms but it is a |
| follows: | | | | valuable tool which contains lots of necessary |
| - Professional Approach | | | | information about the investment objectives and |
| - Offers Diversification | | | | strategies which you must know before investing |
| - Systematic investments | | | | your money in an particular mutual fund. Most |
| - Regular withdrawal | | | | importantly the prospectus has detailed |
| - Automatic reinvestment | | | | information about the risks involved, information |
| - Funds are liquid | | | | about the shareholders. You can also find each |
| - Offers transparency | | | | and every detail about the fees, entry and exit |
| Your money is managed by fund manager | | | | load charges. The fund performance information is |
| generally known as the portfolio manager. It is | | | | also enclosed in the prospectus which you must |
| difficult for an investor to buy or sell individual | | | | never miss out reading. |
| stocks. The fund manager everyday analyzes the | | | | These days updated information is available in |
| potential and the portfolio manager does it all | | | | newspapers and financial magazines. You can get |
| thereby generating good profits from your | | | | the list of top mutual funds and monitor how they |
| investments. You get instant access to hundreds | | | | are performing. You can easily understand if you |
| of bonds or stocks in the market when you | | | | need to buy a particular mutual fund or sell it. |
| invest money in mutual funds. You can diversify | | | | They are considered to be an efficient way of |
| your investment options with access to such a | | | | saving money for future. You can invest money |
| large number of stocks and bonds by mitigating | | | | for your retirement, studies or for any other |
| on the risk of potential market volatility. | | | | financial goals. In short it is safe, transparent and |
| Mutual fund investments give you an opportunity | | | | offers liquid money when you sell your mutual |
| to withdraw money anytime during the year, | | | | funds. Systematic approach is one of the key |
| your money can get deposited in your bank | | | | features of any mutual fund investments. |