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CC3152_L10_ch13+ - LECTURE 10 INVESTING IN MUTUAL FUNDS...

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CC3152 Principles of Financial Planning LECTURE 10 INVESTING IN MUTUAL FUNDS & REAL ESTATE
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2 INVESTORS pool their money and buy shares in the MUTUAL FUND. ABC MUTUAL FUND FUND MANAGER selects and purchases a variety of investment instruments. (I) Mutual Fund Basics [LG1,2]
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3 The Mutual Fund Concept
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4 Advantages of Mutual Funds Diversification —risk is lowered; one share buys a slice of everything in the fund. Professional management —pay someone else to make investing decisions. Financial returns —relatively attractive returns over the long term. Convenience —easy in and out, small outlays, help with record keeping.
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5 Disadvantages of Mutual Funds No choice in securities selection— if you don’t agree with choices, you must change funds. No control over sale of securities within fund—timing of sales has implications for investor.
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