Wednesday, April 8, 2009

Why Mutual Fund Investing fits to Students

Written by Yoshikuni Asaba

We learned the advantages of mutual fund investing. The mutual fund investments include in stocks, bonds, and other financial assets. The advantages are increased diversification, reduced transaction cost (commission fee), professional money management, and greater liquidity. The reason why students want to invest money on mutual fund is because of those advantages. First of all, we don’t have enough money to diversify well enough on stocks or bonds. Many of the stocks cost more than a $100 per share, and you can not diversify the risk of investment. But mutual fund will solve the problem. Remember don’t put all the eggs into one basket. Second, we don’t have time. We are not that super busy, but we want to spend more time on something else, maybe more fun things, or homework. Others might be the knowledge of financial world. If you are not confident enough to start buying shares of your own, it is better to let professionals to do it. Of course there is a chance that you lose your capital, but their risks are reduced by the diversification, and you may not lose everything. The costs of mutual fund investing include, shareholder fees, fund expenses, comparing cost, load, no-load, and others. Please be careful when you select your mutual fund, and research before you decide.

Source 1

Source 2

Source 3

No comments:

Post a Comment