pros and cons of investing in mutual funds
TRANSCRIPT
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Pros and cons of Investing in Mutual Funds:
As Mutual Funds have become a very popular investment option in India. Investing in Mutual Funds has equal amount of Pros and Cons.
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Pros of Investing in Mutual Funds:
Easy to Buy & Sell:
We can buy mutual funds in three ways: From Financial advisors , From fund companies or banks, through brokers.
Professional Management :
Once you invested in mutual funds, You will be alloted with a fund manager(experienced industry professionals ), he will take care of your funds and decide where to invest and other things. you need to pay your fund managers fee.
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Pros of Investing in Mutual Funds:
Investment Size:
You can invest small or large amounts of money in Mutual Funds.
Diversification:
You can invest in different sectors and securities like bonds, fixed income, stocks, income trusts, exchange-traded funds (ETFs).
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Cons of Investing in Mutual Funds:
Returns are not guaranteed:
You can't estimate how much money your fund will gain or lose. You can lose money in a mutual fund, because a fund's value depends on the value of its portfolio holdings. If the holdings lose value, you will lose fund value.
Fees:
Mutual Funds can be expensive to manage, You need to pay Fund manager fees and annual fees regardless of performance.
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Cons of Investing in Mutual Funds:
Fund Managers:
Fund managers take the decision where to invest. some managers records are more successful and some managers records are not. Managers also retire, switch companies or get fired.
