Advertise with Us

Bookmark and Share

Is Investing Mutual Fund Your Cup Of Tea?

If you have come into some money and want to channel it into something sensible, you may want to consider investing in property, or maybe a new car to replace your sad old banger. You may even think about taking the family on a dream vacation.

Or you could hold onto it, and make it work for you in a way which is not as time consuming or stressful as maintaining a property or a car and is far less fleeting than a few sun drenched memories of getting sunburn on the soles of your feet and sand in your eye as the children whinge about wanting more toys and souvenirs.

If you put your money into an investing mutual fund, it is an intelligent way of keeping hold of your cash while making it work for you and generating you a profit.

What Is An Investing Mutual Fund?

When you invest in a mutul fund, your money is added to the metaphorical pot with the money of hundreds of thousands of other investors and it is used to buy stocks and shares. As more money has been pumped into the fund by the large number of investors, the amounts of stocks and shares the fund is able to buy are a lot larger.

In terms of playing the stock markets and all the wheeling and dealing involved as depicted in Hollywood, an investing mutual fund is really the low end of the scale. You will not get to stand in that big room and upset everybody by yelling 'Sell Sell!!' Instead, you will agree to invest a certain sum of money and your mutual fund managers will see that it is invested sensibly.

Not that many people really get to yell 'Sell Sell!!' anyway, so you are not missing out on too much - it can be very stressful.

Why not just put My Money into a Savings Account?

If you invest in a mutul fund, you stand a chance of making a higher profit than had you left your money gathering dust in a bank account. Yes, there are some pretty good interest deals out there at the moment for people who want to set up a savings account, but if you invest your money in an investing mutual fund then you will not be able to access it as easily, which can help avoid frivolous spending of your savings.

Your money stands a higher chance of working for you if you put it into an investing mutual fund.

If an investing mutual fund shows a profit, everybody wins. If you invested $1000 in a mutul fund and the stock has increased in value to $2000, you are able to access your profit by selling the stock back to the mutual fund. Congratulations, you have doubled your money.

If you are enjoying the thrill of it, you might want to leave your money in there longer to see whether it continues to appreciate in value.

How Safe is it?

Investing in a mutual fund can carry some risk - it would be irresponsible not to say that outright. Especially with the market the way it is at the moment, it is possibly not the best time to invest. Or is it? If you had an investment prior to the economic crisis, chances are its value has decreased a lot and you will be quite depressed at the money you lost. But if you buy stock now, when the prices are low, with a view to them increasing again once the World economic health improves, you could stand to make a massive profit in the future.

No investment comes without risk. Some mutual funds are more risky than others, as they invest specifically in more volatile stocks. This means that the value of the stock can increase and decrease rapidly, and you could stand to make a lot or lose everything.

If you think that investing in mutual funds is something you could be interested in, do not jump straight in at the deep end. Research it, talk to your to a stockbroker, talk to mutual fund managers. Make sure that it is your cup of tea before committing.

If you are still not sure, even after speaking with your friends or your stockbroker, then you may be best leaving your money in the dusty bank account - at least you know where it is, right? And then you can sit at home and enjoy a proper cup of tea.