Questions Personal and Family

Why are mutual funds so popular?

Airtract

Heena Samuel

Always look on the brighter side of life

Mutual funds are a really popular investment option for a lot of investors. This is due to the automatic diversification, which they come with various advantages they offer in regards to liquidity, professional management, and customizability. They remain a popular investment vehicle amongst various places in the world, like the US. So let's see what more makes these mutual funds so popular. 

Professional Management

One of the reasons which can be attributed to the popularity of mutual funds is that it is managed and run by professionals who have the experience to know the profitability which you can get from various investments. They are unlike individual investors or fund managers as they are less likely to fall in the trap of emotionally investing in things. 

Customizability

As said in the beginning, a very crucial factor which has contributed a lot to the popularity of the mutual funds is that there is an infinite stock of things which are available. So no matter your investment goals or tolerance regarding risks, there will surely be a mutual fund which will meet your criteria. So you have choices from low-risk funds which have steady but slow growth to the high risk and proportionally high reward stick.

Easy to buy and sell

Mutual funds are easily available through financial planning firms, credit unions, trust companies, investment firms, and even banks. This allows you to sell your shares or units at any time you feel is right to get access to your money. However, in this case, you may get back less than what you have invested.

Easy Liquidity

One of the main reasons behind the popularity of mutual funds is that it provides it’s investors with easy liquidity. An investor can withdraw his investment whenever he feels right. As soon as the investor requests the house for withdrawal for his money, he can get the amount refunded at the prevailing rates.

Mutual funds find themselves becoming exceedingly popular in spite of its famous tagline of it being subjected to market risks because of these features above. 

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