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Advantages of Mutual Funds

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:

  1. Diversification
  2. Professional Management
  3. Liquidity
  4. Flexibility
  5. Convenience

As a shareholder, generally you also receive easy-to-read account statements, detailing information on account values, share transactions, and dividend and capital gains distributions.

{ 4 comments… add one }
  • Keith July 19, 2007, 9:00 am

    Hmmmm… There are disadvantages too

  • Jack July 19, 2007, 7:20 pm

    diversification is the main advantage…

  • Wayne the mutual fund guy January 27, 2008, 6:53 pm

    Unfortunately convenience and the perception that some genius is going to invest their money wisely and make them rich at retirement are their reasons for investing in mutual funds. The fact is of course that management fees and poor management decisions usually make the returns mediocre at best and seldom beat inflation. The perception of growth is just that, perception. The way CPI figures are manipulated the poor investor doesn’t realize until its too late that he could have put a list of stocks on a dart board and done better. And dollar cost averaging, well that’s another myth.

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