General (26)

Category » General

Advantages of Mutual Funds

Published on 17 Jul 2007 in: General

Mutual funds provide you with a cost-effective alternative to direct purchases of stocks or bonds – you don’t need to be wealthy to invest in them, and depending on the fund you choose, shares can be purchased with little or no minimum investment. Mutual funds offer you a number of benefits including:

Diversification
Professional Management
Liquidity
Flexibility
Convenience

Disadvantages of Mutual Funds

Published on 17 Jul 2007 in: General

The Wisdom of Professional Management. That’s right, this is not an advantage. The average mutual fund manager is no better at picking stocks than the average nonprofessional, but charges fees as though she is.
No Control. Unlike picking your own individual stocks, a mutual fund puts you in the passenger seat of somebody else’s car.
Dilution. Mutual funds generally have such small holdings of so many different stocks that insanely great performance by a fund’s top holdings still doesn’t make much of a difference in a mutual fund’s total performance.
Buried Costs. Many mutual funds specialize in burying their costs and in hiring salesmen who do not make those costs clear to their clients.

Category » General

Advantages of Mutual Funds

Disadvantages of Mutual Funds

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