Advantages of Investing in a Mutual Fund

1. Mutual Funds Offer Diversification – When you buy a mutual fund it's like getting access to hundreds of individual stocks or bonds. This way of investing minimizes your exposure to potential volatility unlike buying individual securities.
   
   
2. Mutual Funds Are Liquid – Liquidity is a measure of how quickly you can convert your assets into cash at your discretion. Depending on the policies of your Mutual fund Company, if you want to sell, the proceeds from the sale is usually available the day after you sell the mutual fund.
   
   
3. Mutual Funds Come in Many Varieties – A mutual fund comes in many types and styles. There are stock funds, bond funds, money market mutual funds and balanced funds. The availability of different types of mutual funds allows you to build a diversified portfolio at low cost and without much difficulty.
   
   
4. Mutual Funds are Professionally Managed – Many investors may not have the resources or the time to manage individual stocks. Unlike investing in individual securities, which requires resources and considerable amount of time, mutual fund has managers and professional analysts dedicated to researching and analyzing current and potential holdings for their mutual fund.
   
   
5. Mutual Funds Offer Automatic Reinvestment – Depending on the Mutual fund policy, an investor can easily and automatically have capital gains and dividends reinvested into their mutual fund without extra fees.