Mutal Funds

MUTUAL FUNDS

Mutual funds are the safest way to protect an investor’s money and ensures an ascending growth rate. According to Vanguard, the creators of mutual funds, investing in mutual funds offers benefits you won’t get from trading individual stocks and bonds on your own (Vanguard, 2014). For example, one mutual fund can consist of hundreds to thousands of individual securities (stocks and bonds). If an investor were to buy all those securities on their own, they would rack up thousands of dollars in brokers fees. Also, mutual funds are managed by professionals; they actively manage your fund daily to insure maximum return of your investment. These managers are the first ones who receive economic and financial data from world governments and companies; therefore, they can respond immediately by selling or buying securities that best fit the mutual fund goal. Managers do the work that the average investor does not have knowledge or time to do. If you are afraid of unethical Mutual Fund Managers, the Security and Exchange Commission (SEC) ensures your money is safe by laying down strict guidelines for managers to follow. Managers are also audited regular by the SEC; therefore, the investor can have peace of mind that their money is secure. Low cost fees are some of the great benefits of mutual funds. A positive growth rate, investing in thousands of companies, professional managers actively monitoring you fund, and low expense ratios should make mutual funds your number one choice for a retirement vehicle.

What most Fund Managers will not tell you is, “I cannot beat the performance of an unmanaged index fund.” Vanguards own Standard and Poor’s(S&P) index fund outperformed over 90% of all domestic mutual funds (Motley Fool, n.d). The Vanguards S&P index fund has no managers, almost no expenses, and is not actively monitored. It is just a group of the same stocks that make up the S&P benchmark index. Even more outrageous, Mutual Funds Managers invest an...