PERSONAL FINANCE

7 Advantages of Mutual Fund

June 22, 2014

Quick update everyone!!! I just received my final email for my FAMI account opening and my mutual fund is now working. HURRAY!!!

I still can’t believe that I was able to apply for a mutual fund account. This is actually part of my long term goal and has always been just a dream. But now i know everything will be in reality. The years of investing will be worth it for sure. Thank you God for the financial freedom. 🙂

In today’s post I will be sharing the different advantages of investing in mutual fund over direct stock market. For those who have zero idea, there are two type of stock investment you can actually do.

One, indirectly or through investing in mutual funds and second, directly wherein you will open your own account through a financial broker. What i chose to do first is the mutual fund in FAMI because i have lesser experience in stock investing.

Through my research i listed down the different advantages of investing in mutual fund that you might want to check out. I hope this will give you a positive response why you should start investing now.

1. Low Initial Investment

Starting a mutual fund account will only cost 5,000pesos which is a very fair amount whether you are working in a minimum wage or above minimum. All you have to do is start saving that said initial investment and for additional investment you can just give 1,000 pesos a month!!!

2. Diversification

When you open your mutual fund account, all the money you invest will be diversified to different corporations intelligently picked by experts. FAMI actually uploaded a wheel of partition as to where your investment will be sent you can easily glance at their website.

3. Convenience and Cost-Efficiency

In mutual fund you are  free of stress in buying or selling or any other key terms and what about in the stock market. The firm where you opened your account will do everything for you. All you have to do is give additional investment every month. This will save you time, effort and additional money for transportation too. 




4. Principles of Compounding

If you are starting your researches about financial management then you have already heard of the term compounding. Compounding is the best friend of your investment. The more time your money is in the stock market the higher it will gain interest. Even if you stop investing after five years as long as your money is the mutual fund account it will still gain interest and will still make you a millionaire. This principle is present in every mutual fund accounts.

5. No More Tax

Now this is the true reason why mutual fund is advantageous. There is no tax applicable for this one. All your investment will be with you without any tax deduction. What you see in your paper asset will be the same when you out it to cash.

6. Regulated by SEC

It is actually a good thing to have a back up in every investment that you make. Fortunately, investing in mutual fund is regulated by Security and Exchange Commission so you will have no worries that your investment will be put to waste. Just be sure to invest in true and regulated mutual fund firms.

7. Liquidity

Liquidity is easier in mutual fund because the company will really let you see what is happening to your investment. The breakdown of everything is present that gives you an edge over other investments. There is also easy access to information in mutual fund because they are just a call or an email away and they send information to your email address real time.

Hope you liked this post and i do hope you will start investing now. Don’t let your money slip away.

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Clariza Glino

Izza of SavingsPinay promotes financial literacy for the young and young at heart by providing insights and tips on budgeting, saving, investing and online entrepreneurship. Aside from this blog she also writes at www.izzaglino.com, a beauty and lifestyle blog for frugal Pinays and manages, www.izzagevents.com, a wedding and event business since 2011. For inquiries, topic suggestions or future collaborations email her at izza@savingspinay.ph