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A mutual fund pools money
from a number of investors and invests that money on behalf
of individuals who share common financial objectives. Mutual
funds offer investors a simpler, more convenient, less expensive
and more efficient method of investing.
Mutual funds have been the wild success story of the last decade
for financial products. More than one in four American households
invests in mutual funds. Some are directly invested, and many
are indirectly invested in mutual funds through their pension
and other group plans.
The popularity of mutual funds is largely due to the advantages
that they offer investors:
- Diversification - If there is one ingredient to
successful investing that is universally agreed upon, it
is the benefit of diversification. This concept is also
backed by a great deal of research and market experience.
The benefit that diversification provides is risk reduction.
A mutual fund investor purchases shares of the fund, which
represent partial ownership in all of the fund’s underlying
securities. When you buy an individual stock or bond, you
risk losing money on your investment if the issuer encounters
financial difficulties. While you cannot eliminate this
risk, the best way to reduce it is to buy a diverse mix
of securities whose potential ups and downs counterbalance
each other, reducing volatility and the overall risk to
your principal. By owning many different investments, the
negative impact from poorly performing securities can be
minimized, and the opportunities for selecting successfully
performing securities are increased. Achieving effective
diversification on your own can require more time and money
than you may be able to provide.
- Professional Management - Your investments are
handled by financial experts. When you invest in a mutual
fund, you are hiring full-time professional money managers
to buy and sell the securities in your fund. The portfolio
manager is the individual or individuals responsible for
the implementation of the overall fund strategy, as well
as the buying and selling decisions in a fund's portfolio.
The manager is typically backed up by analysts who have
access to the most current research information and statistics,
and conduct extensive research on the securities available
for the portfolio. Only through mutual funds is this professional
financial expertise accessible to all investors at such
a reasonable cost.
- Liquidity - Mutual fund shares are easy to buy
or sell. Shares may be purchased or redeemed on any business
day at their next determined net asset value. The value
at redemption may be more or less than their original cost,
as the value of shares will vary with market conditions.
- Convenience - Simple yet detailed record keeping.
Account statements are issued monthly in any month that
any activity occurs in an account. At BestVest Investments,
Ltd., one simple, easy to read and understand statement
summarizes the activity in any number of mutual funds, as
well as other investment vehicles. We handle all the paperwork
and record keeping necessary to keep track of your investment
transactions. BestVest Investments, Ltd. will also report
to you on the tax status of your earnings.
- Affordable Minimum Investment - Many funds have
initial investment as low as $1,000. Subsequent investment
levels are also low enough to make mutual funds an attractive
"starter" investment vehicle.
- Reinvestment Option= - Dividends and capital gains
can be reinvested in additional fund shares at the next
determined net asset value, automatically buying additional
shares and increasing your current holdings. This election
to reinvest dividends can be made at the time of share purchase
or by contacting us subsequently.
Important Notice:
This and other information on mutual funds is provided
for general informational purposes only. Funds are offered
by prospectus only. As with any investment, you should
always carefully read the prospectus and make sure you
understand it fully. Investigate before you invest is
always good investment practice. Also remember that
market volatility can significantly impact short-term
performance. Results of an investment made today may
differ substantially from the historical performance
shown.
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