Monday, April 29, 2013

Fifteen reasons why mutual funds are good for you :

Here are fifteen compelling reasons why mutual funds are good for you.
  1. The single most important function of mutual funds is to help you in earning a regular income or to generate capital gains over a period of time.
  2. Mutual funds do not offer an assured return. But, they have proven to be profitable long-term investments for individuals.
  3. Mutual funds have great potential. They generate higher returns than something guaranteed. They have created wealth for generally cautious investors who prefer safer investment options.
  4. Mutual funds have made investing very simple. You can do it with greatest of ease. And they are very economical and cost effective. But, remember, mutual funds are not perfect. They are almost perfect.
  5. Mutual funds are tightly regulated by the Securities and Exchange Board of India (SEBI). There can never be a case of any mutual fund vanishing with your money. You can be rest assured. It is just not possible.
  6. If you do not have time to research individual companies, then mutual funds are the best way to invest. A team of investment professionals does all the research and investing on your behalf. You just have to sit back, relax! And hold your mutual funds for long periods.
  7. Your money is pooled along with others, to take advantage of investments you normally do not have access to.
  8. Mutual funds are required to adhere to well defined risk management parameters and investment patterns. Your money gets invested with discipline and prudence.
  9. They have a nice way of lowering your risks. By spreading your money across various assets and strategies. Thus protecting you against putting too many eggs in the wrong basket. 
  10. Mutual funds promote good habits of savings and investing. They have protected countless investors against costly mistakes in the stock markets.
  11. Mutual funds help you in managing your future better. By helping you to achieve your financial goals. They help you in getting you where you want to be.
  12. You are free to sell your mutual funds anytime. You can sell them in parts or in small portions to suit your requirement. You get your money back in 3–4 day’s time with no questions asked.
  13. The temptation to engage in the ever so exciting, but self-destructive trading is more or less absent in mutual funds. Remember, in the short run hares may have more fun. But, in the long run it is always the tortoises that win the race.
  14. You don’t have to spend time in picking stocks. Neither are you required to monitor the stock ticker tapes or the stock markets very closely.  It frees up your time for you to do all those things you would like to do.
  15. Mutual funds generally provide terrific value to long-term investors. They are excellent vehicles for accumulating wealth for yourself and your family.

Source : moneylife

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