Before trying to understand the various benefits available through mutual fund investments, it becomes necessary to first comprehend what is a mutual fund. Richard Cayne of Meyer International explain…
Before trying to understand the various benefits available through mutual fund investments, it becomes necessary to first comprehend what is a mutual fund. Richard Cayne of Meyer International explains that a mutual fund is a company that essentially invests in a diversified portfolio of securities. These companies have greatly simplified the investing and saving process for individuals, as the money invested by mutual fund owners is pooled together for investment in securities, which makes available a larger market share, thereby increasing the returns earned by an individual with a simple play on cumulative numbers. According to Richard Cayne of Meyer International, while every investment vehicle comes with a certain amount of risk, mutual funds offer the following benefits that generally outweigh their risk factors.
Richard Cayne of Meyer International mentions an automatic diversification of assets to be one of the biggest advantages of investing in mutual funds. Most experienced investors would understand the gravity of this benefit. Since mutual funds are designed to hold an assortment of securities, they offer a wider diversification for your portfolio as compared to when you would try and manage it on your own. Also, since your assets are pooled together with the others, this makes for more money to be spread out resulting in better diversification.
Richard Cayne of Meyer International mentions that investing in mutual funds places a host of options at your disposal. You can easily choose to invest in stocks, bonds or even money market funds. You can make your choices on the basis of your risk appetite and reward expectations. For instance, while stock mutual funds offer higher returns, they also entail a higher risk, on the other hand, bond mutual funds offer medium level risks along with medium returns. Besides placing investment choices at hand, mutual funds also give you the option to liquidate your investments in a quick and timely manner. While there may be some restrictions regarding monthly, quarterly or yearly liquidation policies, Richard Cayne of Meyer International mentions that it still places greater flexibility in your hands as compared to pulling out money from real estate assets.
Last, but not the least, Richard Cayne of Meyer International mentions that mutual fund investments come backed by an entire team of professionals that not only monitor the markets, but also offer you timely advice on improving your portfolio. Given that the remuneration of these professionals largely relies on the returns you get, you can rest assured that they will do their best to help make your portfolio outperform itself year after year.
Richard Cayne is Managing Director of the Meyer Group of companies which form part of Asia Wealth Group Holdings a London listed financial services Holding company.