Monday, 30 July 2012

Mutual Funds - The Safer Portion of Equity Investment


Apart from Stock Shares, Mutual Funds are another aspect of Equity Investment, where equities are in the hands of private individuals.  Mutual Funds are usually considered as the Safer Portion of Equity Investment.

Mutual Funds can be defined as a professionally managed Investment Program which is funded by shareholders and it does trade in diversified holdings. Like Stock Shares, even Mutual Funds have their own pros and cons. Now being part of Equity Investment, even Mutual Funds may not give total guarantee of all time fruitful monetary profits so even over here careful & planned investment is recommended by various market experts.

In Mutual Funds, money is taken from various investors and is invested in Stock Markets on the behalf of the investor(s). Mutual Funds hold various numbers of companies so even if one company’s value falls in the market, then also an investor does not lose all the money.  An investor has to sell or purchase Mutual Funds from the Funds House itself. Mutual Funds cannot be sold or bought from another investor like it happens in Stock Shares.

An Investor may have to pay annual expense penalties for early withdrawal of Mutual Funds which makes this option of Equity Investment a bit rigid similar to Bank Fixed Deposits in Safe Financial Investment. Various Financial Consultants and websites over the Internet provide detailed explanations regarding Mutual Funds. Now it’s totally up to the Investor to decide whether he or she wants to go for Stock Shares or Mutual Funds in Equity Investment with some part of the earned money.

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