Thinking about investing? Consider Mutual Funds!

By: Alvonta Primm (Brotha P)

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Investing is something that I have thought about off and on for years. Like the average person, I felt that for me to become a successful investor, I would have to know the stock market like the back of my hand to increase my chances of success and not end up on the losing end penniless. Although knowledge of how the stock market works is needed and can be of great benefit for would-be investors, you don’t have to be Warren Buffett or some financial genius when it comes to investing. I remember sometime last year when I mentioned to my dad that I was interested in investing, he encouraged me to look into mutual funds and pointed me in the direction of a family friend who could help. Mutual funds are investments that pool your money together with that of other investors to purchase shares of a collection of stocks, bonds along with other securities which is known as a portfolio. This portfolio is overseen by a portfolio manager. Shortly after that conversation, I had my very first mutual fund account at the tender age of 30. Before this, I had never heard of mutual funds. As I did my research, I realized that mutual funds were perfect for someone like myself who wanted to get into investing but had limited knowledge. You also don’t need a lot of money to get started. Listed below are reasons why mutual funds are good investments and the benefits of having them:

1.)   Mutual funds are professionally managed. When you invest in mutual funds, the portfolio will be reviewed by a professional manager on a daily basis. That manager would then research companies and analyze the market before making investment decisions on your behalf.

2.)   Diversification of your portfolio. Because mutual funds are made of a collection of shares of different companies from different industries, you don’t have to worry about diversifying your portfolio on your own. Not having to worry about picking stocks from different companies is one less headache new investors will have to worry about.

3.)   You don’t need a lot of money to get started. From personal experience, I can tell you that you do not need to have a six-figure salary to get started (even though the more you have, the better). As a college student who waits tables part-time, I donate $50 every month towards my mutual fund account. Companies such as Vanguard, Fidelity, and Primerica can help you get started

I do hope this article helps you out a great deal. I want you to at least take two things from this article:

  1. Although the sooner you start, the better, it is never too late to start investing nor are you too old.
  2. Anyone is capable of doing this! I will continue to explain the workings of mutual funds in future articles as well as other ways to invest in future articles.