Before we plan to buy mutual funds, always take a step to understand the pros of mutual funds. This is to ensure how the investment could benefits us and know how to avoid the pitfalls.
There are many reasons to buy a mutual fund. Here are some of the reasons:-
1. Mutual Funds Offer Diversification
The beauty of a mutual fund is that you can buy a mutual fund and obtain instant access to a hundreds of individual stocks or bonds. Otherwise, in order to diversify your portfolio, you might have to buy individual securities, which exposes you to more potential volatility.
2. Mutual Funds are Professionally Managed
Many investors don’t have the resources or the time to buy individual stocks. Investing in individual securities, such as stocks, not only takes resources, but a considerable amount of time. By contrast, mutual fund managers and analysts wake up each morning dedicating their professional lives to researching and analyzing current and potential holdings for their mutual fund.
3. Mutual Funds Come in Many Varieties
A mutual fund comes in many types and styles. There are stock funds, bond funds, sector funds, target-date mutual funds, money market mutual funds and balanced funds. Mutual funds allow you to invest in the market whether you believe in active portfolio management (actively managed funds) or you prefer to buy a segment of the market with no interference from a manager (passive funds and index mutual funds). The availability of different types of mutual funds allows you to build a diversified portfolio at low cost and without much difficulty.
4. Mutual Funds Have Low Minimums
Many mutual fund companies allow investors to get started in a mutual fund with as little as RM1,000. Investors can add their premiums as low as RM100 monthly depends on their objectives.
5. Systematic Investing and Withdrawals with Mutual Funds
It is simple to invest regularly in a mutual fund. Many mutual fund companies allow investors to invest as little as RM100 per month directly into a mutual fund. Money can be pulled directly from a bank account and invested directly in the mutual fund. On the other hand, money can be regularly withdrawn from a mutual fund and be deposited into a bank account. There are generally no fees for this service.
6. Mutual Funds Offer Automatic Reinvestment
An investor can easily and automatically have capital gains and dividends reinvested into their mutual fund without a sales load or extra fees.
7. Mutual Funds Offer Transparency
Mutual fund holdings are publicly available (with some delays in reporting), which ensures that investors are getting what they pay for.
***Note: Please do contact me at 0126624231 or PM if you need anymore details especially investing in Public Mutual. Thanks
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