subject: The Importance And Need Of Mutual Funds In Our Life [print this page] Nowadays, mutual funds have become one of the most significant financial service vehicles for investments. You can almost say that they are the building blocks of your investment portfolio. Frankly, having a good and reputable investment portfolio means that our investment will derive rich dividends after a given period of time. So in short, mutual funds are one of the saving schemes that could come in handy during trouble times.
With thousands and thousands of funds available in the market, it is not difficult for investors to choose the best ones and also about four or five funds. But the only problem that investors could face is sieving from the variety of choices that are available. For some, this task can be restrictive. Now just because the procedure is intimidating, it doesn't mean that it is avoidable. If you follow some of the guidelines and other essential steps, you can make sure that the funds which you have selected are worthwhile.
There are two types of mutual funds. One type is investing in gold. This is a profitable one as gold is an entity that keeps increasing its value day by day. So what happens is that if you invest in gold, you are sure to get some amount of profit at the end of the year. Now assume that you are investing in gold as mutual funds. Every month, you will be paying a certain amount to a broker. This broker will invest the amount you give to buy a certain quantity of gold.
After paying for certain months, especially for twelve or twenty four months, your total investment would have doubled as gold prices keep increasing at a tremendous rate. Then you can withdraw your investment whenever you want. So after a given period of time, you would get back the money which you have invested along with some amount of profits.
The same can be said about investment in companies and projects. If you invest in companies and projects, you get certain dividends at the end of the year. Depending on how much profit the company has made or whether the project is profitable, the dividends will differ. Some years you may get high dividends while in other years it will be less. Also you could get no dividend in a particular year. This usually happens when the company suffers losses or the project becomes a failure.
So that is why most people like to invest in gold as mutual funds rather than in companies. The fear of getting losses is the one that makes people avoiding to invest in companies. Also you do need to know a lot about the company before investing in it. Whether the company has the ability to make profits or the business that the company does is something that can earn suitable returns is what you need to watch out for.
Another thing that makes people invest in mutual funds is not profit, but the ability to move money in an easy way. Many of us like to keep some savings and hate to spend the amount. Rather than keeping their money idle, by investing in mutual funds will help them to see that their money is flowing. In a sense, it keeps changing from one hand to another. Plus whenever they want to take back their money, they can easily do so without suffering any deductions. Also they may get added money as interest. That is definitely a good thing.
Today the mutual fund is a huge market, thanks to the Internet. It has helped people to easily purchase mutual funds and sell them instantly. Also the availability of high speed internet that are part of the deals of various service providers like Xfinity Bundle Deals has made it possible for people to indulge in this mutual fund market.
by: Mark Bennett
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