Sunday, 29 November 2009

• 10 Benefits to Mutual Funds

  
  

  
  Speaking of stocks, Pcgecko85@xanga recommended mutual funds as easy, hands-free investments for buyers new to stocks. Mutual funds are groups of multiple stocks controlled by a fund manager, and investors see gains and losses on a yearly basis.
  
  About.com has a list of 10 benefits to mutual fund investing:
  
  

  1. Diversity. Mutual funds allow you to put your money in many different types of stocks with a single investment.
     
  2. Professional management. Mutual funds will save you time and ensure that your money is in the hands of an expert.
     
  3. Flexibility. Choose an actively managed fund if you want the fund manager to be consistently buying and selling the stocks in the fund, or pick a passive fund if you want its stocks to remained unchanged.
  4. Low buy-ins. Many mutual funds have $1,000 minimums, and some Schwab funds go as low as $100.
  5. Simple transfers. You can usually arrange for funds to be directly deposited from your bank account to your mutual fund, and vice versa, all without a fee. 
  6. Automatic reinvestment. Instead of reaping your gains in the form of a check, you can arrange for your mutual fund to automatically reinvest them in the fund, again without a fee.
  7. Transparency. Information on the holdings is available to the public (subject to a slight delay).
  8. Liquidity. Sell your share of a mutual fund, and you'll get the money the next day.
  9. Accountability. Mutual funds keep audited track records, which means you known that the returns they claim are accurate.
  10. Safety. If the company owning the mutual fund goes under, you will receive a payout corresponding to the percentage of the fund that you owned.

  
  Have you ever invested—or considered investing—in a mutual fund? What do you think of this list?
  
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