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Mutual Funds – Why Do People Buy Them? Florida Broker Misconduct FINRA Arbitration Attorney
Mutual funds are a common vehicle in today’s investment world. Here are a few reason why People buy them.
However, please keep in mind that this information is being provided for educational purposes only. Therefore, it is not designed to be complete in all material respects. Thus, it should not be relied upon as providing legal or investment advice. If you have any questions relative to this post, you should consult with a qualified professional.
Mutual funds have and continue to be a popular choice among investors because they generally offer the following features:
- Professional Management. The fund managers do the research for you. They select the securities and monitor the performance.
- Diversification or “Don’t put all your eggs in one basket.” Mutual funds typically invest in a range of companies and industries. This helps to lower your risk if one company fails.
- Affordability. Most mutual funds set a relatively low dollar amount for initial investment and subsequent purchases.
- Liquidity. Mutual fund investors can easily redeem their shares at any time, for the current net asset value (NAV) plus any redemption fees.
All mutual funds are offered by prospectus. Before investing in a mutual fund, you should obtain, read and make sure that you understand the investment goals of the fund, how the fund will attempt to accomplish its investment objective and the risks associated therewith. Any questions that you might have relative to the information contained in the prospectus should be addressed to a qualified professional.