Have you ever heard of mutual funds? A mutual fund is a company that pools together a
group of individuals and invests their money in stocks, bonds, and other securities. With the economy of scales and experts managing the fund, investments grow faster than in a traditional savings account.
What makes mutual funds suitable for young professionals or just investment newbies is that you don’t have to be a millionaire to start investing. Some funds only require PhP5,000 as an initial investment. Many mutual funds are available out there and here are four reasons why you should invest in one.
If you’re a newbie investor, you may not have the skills and knowledge needed to grow your money. And not everyone has the time to learn and be updated on the performances and risks of different investment options. Mutual funds can solve that problem by employing a fund manager who will choose which investment options would be best for you. It’s like having a professional financial advisor on your payroll.
One advantage of a mutual fund is that it pools all the investor's money and puts it in diverse products to minimize exposure to potential losses. We know all investments involve risks. But those risks are reduced when you invest in mutual funds.
Some investments like real estate are cumbersome to buy. You need to accomplish lots of paperwork to buy a house. It’s also hard to liquidate. Plus you must wait for a buyer to convert your investment into cash. But with mutual funds, you can purchase shares on different channels. You can even buy shares online. It’s also easy to liquidate—you can sell your shares on any given business day.
There are different mutual funds for different investment styles. Some investors prefer to go slow yet steady. Others want to grow their assets as fast as possible, even if the risks are higher. Some are attracted to fixed-income investments, while others invest heavily in the stock market, which can yield higher returns in a short period. Whatever type of investor you are, putting your hard-earned money in mutual funds is a surefire way of stepping up your investing game.
Thinking of ways to invest your money? Consider putting your savings in life insurance. Visit https://shop.fwd.com.ph to find the right plan for your lifestyle.