Question

Why invest in mutual funds?

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2nd Nov 2009 by Michael Haltman

The simplest answer for investing in mutual funds is to achieve the diversity that you would not be able to on your own. Typically it is said that in order to achieve diversity in a portfolio you need at least 5 or 6 different stocks which allows you to put you eggs in may different baskets instead of only one.

Mutual funds were created so that smaller investors could "pool" their money together and achieve the diversity they could not on their own. There are load funds, no-load funds, open ended funds and closed funds, each providing different advantages. No load funds would generally be the direction I would go.

Mutual funds are available for stocks and bonds by a wide variety of companies.

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This answer is the subjective opinion of the writer and not of FinancialAdvisory.com



2nd Nov 2009 In Mutual Funds 1 Answers | 523 Views

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