The following post is a contribution from Gary, a personal finance blogger who focuses on investing, saving, real estate, credit and debt, career and education advice, budgeting, and insurance at Gajizmo.com. Gary has worked at an internet company on their M&A team, as well as two private equity firms, and has a Real Estate Broker’s License.
Investment funds allow small and large investors to pool capital together and enjoy higher investment returns with lower risks than private brokerage accounts. Mutual funds offer many benefits, such as easy diversification of securities, professional management, lower trading fees and costs, and increased liquidity. However, investing in these funds requires research. The type of fund an investor chooses should fit his/her financial goals – capital growth vs. income – and investment philosophy, such as managed vs. passive, industry focus, growth vs. value vs. dividend stocks, types of securities purchased (stocks, bonds, REITs, commodities, etc.), and the size of companies in the portfolio.