Why people invest in mutual funds?

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Guest60 0 Comments

Mutual funds seem to be a good option but I don’t understand why so many people choose to invest in something that they can’t control. It’s also the management fees that can be a considerable expense.

1 Answer

score 0 · Answer 1 · 2013-05-07T23:09:04+00:00

Because mutual funds employee people that have the necessary training and skills to get better returns. In addition, mutual funds pool funds together so they invest in portfolios that are well balanced and diversified so that the risk is lower and the returns more stable.

So even if you don’t consider the fact that a mutual fund is managed by professionals, the fact that there are a lot of funds available, it creates something that you could consider as “economies of scale”.