Mutual Funds
If you want to earn higher than banks and bonds could offer but you're not yet ready to take a plunge in the stock market, you might want to try investing in MUTUAL FUNDS. Most investment professionals agree that its smarter to own a variety of stocks and bonds than to gamble on the success of a few. But diversifying can be tough because buying a portfolio of individual stocks and bonds may be expensive. And knowing what to buy and when can be a full-time job.
Mutual funds offer one solution. When investors put money into a fund, it's pooled with money from other investors to create greater buying power than they would have investing individually.
Since a fund can own hundreds of different securities, its success isn't dependent on how one or two holdings do. And the fund managers keep constant tabs on the markets, adjusting the portfolio to reflect changing conditions.
Mutual funds offer one solution. When investors put money into a fund, it's pooled with money from other investors to create greater buying power than they would have investing individually.
Since a fund can own hundreds of different securities, its success isn't dependent on how one or two holdings do. And the fund managers keep constant tabs on the markets, adjusting the portfolio to reflect changing conditions.
One of the disadvantages of a mutual fund is the charges. You have to pay management fee for the the fund managers whether or not they do a good job. They generally charge around 3% as entry fee and around 2% for management fee and if you don't hold to your shares for at least one year, there is an exit fee of around 2%.
