Advantages and Disadvantages of Mutual Funds Investments

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The development of times and technology go hand in hand with the people’s perspective in financial management. People have started to become interested in investing through mutual funds. Although they do not fully understand the advantages and disadvantages of mutual funds investing.
The popularity of mutual funds investing requires people to understand the risks. Mutual funds as a form of saving money with flexible time are an attractive option for the public.



1. Easy to learn

Mutual funds are investment products that are easy to understand and practice because they start from buying units and transactions involving trade or sell will be carried out by investment managers who will send reports on the development of mutual fund investments.

2. Risk diversification

To anticipate investment risks, diversification is carried out by distributing investors’ money to various instruments so that if there is a risk not all of them will decline in value simultaneously. For example, a mutual fund on the money market, investment will be divided into various money markets to prevent a decrease in investment value. Diversification cannot be done by investors alone but must be managed by various investors so that it can be done optimally.



3. High Profits

Mutual funds can provide an average return of up to 20% per year, one of which is generated by money market mutual funds. This instrument is an option in preparing funds for the future or a certain time by looking at the advantages and disadvantages of mutual fund investments that will be obtained.

4. Small / Little Investment Fund

There is no need to spend large amounts of capital when starting an investment because mutual fund sellers continue to innovate so that the product instrument issued can be reached by various levels of society. With the small amount of capital for mutual fund investment, it is hoped that the public will flock to invest.



5. Managed by Investor Managers

Mutual funds overcome limited knowledge and lack of time for potential investors to conduct investment analysis by submitting the investment process to a professional investment manager who is experienced in managing investment portfolios. Investors also do not need to worry about fees to investor managers because mutual funds are a collection of various investors so they are borne by all investors.

6. Liquidity Risk (It takes time to disburse)

Disbursement of funds from mutual fund investments takes between 3 to 4 working days from the time the order is given until the money reaches the investor’s account. It is unlikely that the liquidity will not be disbursed if the investment manager is unable to provide funds to repurchase the Mutual Fund Unit.

7. Mutual Funds are closed

The closure of mutual fund investment by the authorities when the amount of managed funds falls below the minimum. However, this is also a small possibility as anticipation if mutual funds are closed.

8. Investment Costs

In investing, an investor will be subject to significant costs that include investment manager fees, operations, storage (custodian), and marketing partners significantly, thus impacting the return received by investors.
Now you know and understand the advantages and disadvantages of mutual fund investing that have made you hesitant to start investing. Well, mulaila is for mutual fund investments according to existing funds for flexible timeframes.

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