Mutual Funds offer a simple solution for the small investor.
When you put your money into a fund, it is pooled with money from other investors to create much more buying power than you would have on your own.
Secondly, investment professionals agree that it’s smarter to own a variety of stocks and bonds than to gamble on the success of a few. But, for an small investor, diversifying can be expensive and tough because knowing what individual stocks to buy – and when – is a full time job.
A Mutual Fund, on the other hand, could have tens of different stocks or bonds and is managed by qualified investment professionals who constantly watch the markets, making your money work hard to get the best possible returns.
And finally, unlike physical assets or some illiquid stocks, mutual funds offer liquidity – easy access to your money within 2-3 working days of placing a sell order.