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What are the four main advantages of mutual funds?

What are the four main advantages of mutual funds?

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Answer #1

What are the four main advantages of mutual funds?

  1. Mutual funds provide diversification benefits because they comprise of many stocks from different sectors
  2. Mutual funds are managed by professionals, which takes the burden out of individual investor
  3. Small amounts can be invested in mutual funds, whereas to buy the stocks individually may not be possible with small amount. A fraction of a stock can be purchased using Mutual Funds, but that is not possible with individual stocks
  4. Investing through mutual funds is cost effective as compared to investing in individual stocks
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