In this article, My Economy Guide will explain in detail the Mutual Funds , an important tool for investors . If you are curious about the answers to questions like “What is mutual fund?”, Nasıl How and how much do mutual funds earn? Tavsiye, we recommend you to read this article. Before starting to explain mutual funds, we also recommend that you read our article about bonds, another investment instrument .
Mutual funds are among the investment instruments used today, which are among the leading ones, performing and relatively reliable than other instruments. At the same time, these funds are very popular for those who do not want to engage with their investments frequently and want to earn less risk.
WHAT IS AN INVESTMENT FUND?
Mutual funds are funds created by a certain number of investors coming together to achieve common investment objectives. These funds are managed by experts in the field of economics and investment. These experts try to evaluate the investments by buying the required funds and the securities collected in the pool. An investor investing money in the mutual fund becomes a partner of this fund. The proceeds from the fund are distributed to the partners of this fund in proportion to their partnership. Thus, investors who want to invest with confidence, without directly monitoring the market and the contribution of experts will gain.
DIVERSIFICATION IN INVESTMENT FUNDS
We said that one of the main reasons why mutual funds are popular is the low risk. One of the most important steps in reducing the risk in investments is to diversify the investments into different instruments. Dozens or even hundreds of different stocks, various bonds and more different investment instruments are used by experts in mutual funds. This enormous diversity thus significantly reduces the investment risk. Mutual funds, which allow investment with different risk levels, aim to minimize the losses that can occur by keeping the risk to a minimum. In this way, the effects of significant and negative movements in the economy and markets can be reduced. Investors who attach importance to diversification can buy and invest in different funds. People who have invested in more types of vehicles with a large number of funds can further reduce their already low risk by this diversification method. We stated that it is beneficial to increase the number of funds while diversification. However, increasing the number of funds will also reduce the strength of your funds. Therefore, the number of funds you will buy is closely related to the amount of money you invest.