Thursday, October 11, 2007

Mutual Fund Basics

Aside from time deposits, where else can you earn higher interest rates? It's time to learn a thing or two about Mutual Funds. The concept is simple, you and a group of other investors pool in your money together and a fund manager from a mutual fund company/bank will be the one to invest all your money in various securities like bonds and stocks.

It's like having an expert decide where your money should be invested. This also addresses the problem of not having too much to invest because the minimums here can reach as low as Php 5,000. It won't be a problem because there are other investors like you who contribute to the investments.

There are four types of mutual funds which are:

1. Stock or Equity Funds
2. Money Market Funds
3. Balanced Funds
4. Bond Funds

The risks and gains vary depending on the type of fund you choose. You can gain from both interests and dividends in mutual funds. Remember that you can win or lose in mutual funds. The money that you won't use for around 2 years is the best amount to put in a mutual fund.

If you are interested or want to learn more, try asking your bank about their mutual funds.

This link may also help:
They have FAQs section that is easy to understand and they are a mutual fund company as well.

I haven't invested in mutual funds but i think we should act fast because time is ultra precious when it comes to investments! :)

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