About Mutual Funds:
Definition: Mutual Fund is the process of collecting funds from a group of investors for combining those funds for investment. The money gathered through this scheme can be invested in various types of the market, and these markets are the responsibility of the mutual fund manager.
Mutual Funds have several benefits over another investment such as stock or forex trading. It is termed as diversification. It is a scheme that can be used for a wide range of investments. There is an added benefit of professional supervision and also from a mutual fund manager.
Types of Mutual Funds:
1. Equity Funds: These are the funds made up for only common stock. It can be a risky option that other types.
2. Fixed Income Funds: These are made up of and corporate securities that provide a fixed return. It is usually a low risky deal.
3. Balanced Funds: It is the combination of both stocks and bonds. It is a low-risk deal. It is offered low rates of return. You have to decide how much risk you are willing to take before investing money.
The following are a few reasons why investing in mutual funds are a great way to save your money:
- You can manage them easily. When you buy mutual funds, you are actually using a professional manager to manage your purchases. A mutual fund
- It is easy to deal with mutual funds. You only have one portfolio to deal with instead of hundreds of stocks.
- One can exchange mutual funds for cash quickly. You just need to put your order in time and when the market closes a cheque will be issued to you.
- It is less risky than stocks. Instead of investing in one company, you may be investing in as many as 25-5000 companies.
