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Why invest in mutual funds? Explain.

Why invest in mutual funds? Explain.

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Answer #1

Invest in mutual fund due to the following:-

  • Diversification.

These funds generally invest in companies and industries with diversity. This helps to reduce your risk if one company fails.

  • Professional Management.

The managers will do the research and analysis for you. Then they select the best securities and oversee the performance.

  • Cheaper and affordable.

These funds set a comparatively low dollar amount for the initial investment and subsequent purchases

.

  • Liquidity. These fund investors can quickly convert their shares in cash at any time, for the net asset value (NAV) plus fees.
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