This post is entitled Mutual Fundness because I have developed a deep relationship with mutual funds.
Like what I mentioned in my previous posts, Bo Sanchez was instrumental in my financial growth after reading his book, 8 Secrets of the Truly Rich (How It All Began)
Soon after, I attended his seminars on financial coaching. It was during that time that I first learned about mutual funds.
What are Mutual Funds?
These are investment companies that pool money from numerous investors, with the same investment objective. Through the issuance of its shares to the public, the pooled funds are then invested by professional fund managers in a diversified portfolio of securities or investment instruments.
Source: ICAP.
Source: ICAP.
Types of Mutual Funds
TYPE | INVESTMENT COMPOSITION | OBJECTIVE | AVERAGE EARNING |
STOCK FUND | shares of stocks; "equity funds" | long-term capital growth | 18% |
BALANCED FUND | stocks & fixed-income | medium to long -term for moderate investors | 12% |
BOND FUND | fixed-income instruments | stability plus reasonable growth | 6% |
MONEY MARKET FUND | short-term fixed-income instruments | stability plus minimal growth | 2% |
Benefits of Mutual Funds
- Diversification
- Tax-Exempt
- Professional Fund Management
- Affordability
- Liquidity
- Safety (Regulation and Disclosure)
- Convenience
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