Why Mutual Funds
Financial columnist Jane Bryant Quinn has called mutual funds “every investor’s bedrock buy.” Why? Because mutual funds offer investors, especially individual investors, compelling advantages.
Professional management, research, and analysis
When you invest in a mutual fund, in essence you are hiring full-time, professional money managers to decide what to buy, when to buy, and (perhaps most difficult of all) when to sell.
Diversification
Mutual funds reduce the risk associated with owning an individual security by owning many securities in their portfolios.
High liquidity
You can buy or sell fund shares easily and quickly.
Low initial investment and lower subsequent investments
Some funds, like Pax World, allow investors to open accounts with as little as $250 and require subsequent investments of only $50.
Exchange privileges
Many funds belong to a “fund family” – a group of funds, each with different goals but all managed by the same company. Within a fund family, you can often easily move your assets from one fund to another as markets or your investment goals change.