Investors who are either starting out or who have little money to invest can actually take advantage of the expected growth opportunities that billionaires like Warren Buffett see on the horizon.
The way to participate in this? Mutual funds.
If you are new to the investment world, you are strongly encouraged to consider the benefits to mutual fund investments.
Here are five of the biggest benefits to mutual funds.
1.
Low entry point.
In order to fully participate in the market, you normally need six figures (or more if you want to really diversify your holdings).
Mutual funds allow you to start with as little as $25 per month or an initial investment of just $500.
2.
Diversification beyond your dreams.
Most funds will have more than 20 individual holdings (more often, they hold more than 100 different securities).
This kind of diversification by sector and market is literally impossible unless you have hundreds of millions to invest.
3.
Professional Management.
funds hire only the most (over) qualified and keen investment professionals to manage your funds.
Since everyone in the industry is aiming to out-perform one another without taking on undue risks, even the worst fund is managed by someone more qualified than regular folks like you or I.
4.
Variety of offerings.
If you want a balanced fund that will give you a broad market balance between different stocks and bonds, you can find it.
If you simply want a Bond or Mortgage fund to provide income while you manage your own equity portfolio, you can find a fund like that, too.
Mutual funds can be as all-encompassing or as specialized as you want; you just need to find the right one for your needs! 5.
Cheap.
Instead of buying into a fund, you could technically do all of your own research, trading, and administration.
Considering what your time is worth, how much it would cost to research and administer the funds, buying a mutual fund instead is quite a bit cheaper.
As you can see, there are many benefits to owning a mutual fund, whether you are just starting out or you need additional diversification within your existing portfolio.