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Why Mutual Funds
A mutual fund pools the money of
many investors to invest in a variety of different securities.
Investments may be in stocks, bonds, money market securities or some combination
of these. The securities are professionally managed on behalf of the investors,
and each investor holds a pro rata share of the portfolio – entitled to any
profits when the securities are sold, but subject to any losses in value as
well.
More than 88 million people, or almost
half of all households in
America
, invest in mutual funds, representing trillions of dollars in investments.
Mutual funds have become the investment choice to reach lifetime goals. The
reasons:
So where can you invest your money? The answer for more and more Americans
is to invest in mutual funds.
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Professional
money management.
Mutual funds provide the benefit of having someone else manage your
investments and take care of the recordkeeping.
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Diversification.
A mutual fund, by its very nature, is diversified – its assets are
invested in many different securities. Beyond that, there are many
different types of mutual funds with different objectives and levels of
growth potential, furthering your opportunity to diversify.
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Affordability.
Minimum investment requirements on many funds are low enough that even
the smallest investor can get started in mutual funds.
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Liquidity. Investors can
readily redeem their shares, although some funds may charge redemption
fees.
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