Mutual Funds ?
The stock market is one of the biggest wealth generator; everybody wishes to participate in it. However, the elemental knowledge and the time required to be a professional broker or just a beginner trader stop many from trying it. The almost unlimited profits potential and the high dividends have created various financial instrument with lower risk for the general public to invest in the stock market a get the its benefits,
What is a Mutual Fund?
A mutual fund is a pool of money from hundreds of people, which is invested on diverse stocks, securities, and bonds to generate profits for all the participants accordingly to their participation size. It decreases the risk relates to the stock market investment, and it is managed by professional brokers who select low-level risk assets to invest it on a diversify portfolio. In other words, a mutual fund is a pool of money open to anybody who meets the minimum investment capital to be part of it or buy a share of it. All this fund money is used to fund hundreds of investment on the stock market as a way to reduce the investment risk.
Mutual Funds Advantages
· Low risk Investment mutual funds are considered a small risk investment since its managers will diversify the portfolio to decrease as much as possible the risk related to stock and assets trading.
· No financial or investment knowledge is needed the mutual funds are managed by professional broker who will make all the choices based on technical and fundamental analyses. You do not need any experience since you will not take any financial decision besides buying a fund participation.
· Investor can enter and exit the funds; open-end funds can be entered or leaved daily. You can sell to the fund your participation regardless its size at the end of any business day. On the other hand, you can increase your fund participation or enter a fund almost any time.
· Higher dividends than saving accounts mutual funds generate higher dividends than traditional saving account or time deposits.
· It is manage by proven professional brokers; you can relax and be worry free about choosing assets or reading charts. Your money is working for you, and profesional stock brokers invest it.
· Government controlled, and oversight mutual funds are highly controlled by the government to prevent any misused or wrongdoing.
· Transparent management, the government requires that mutual funds follow elemental management guidelines.
· Mandatory management report each fund participant receives a detailed report about how and in which assets the fund have been invested and the profits those investment have generated.
In a nutshell: A mutual fund is a secured way to invest on the stock market and get profits from it. The fund is created by the investment of hundreds of people who funded it. Professional brokers, who invest it on a diverse portfolio to decrease related risk, manage the fund money. The profits generated by the fund are divided among all the fund investor accordingly to their participation size.