The Fault in Our Mutual Funds

Though the mutual funds are a safe bet as it is managed by the professionals and is well diversified. But everything that is good also has some faults in it.

Mutual Funds also has some faults which can be removed by selecting the right fund.

The faults in Mutual funds are ass follows:

Higher Fees: Mutual Funds have very high fees. The fees that mutual funds take is very high compared to the normal brokerage fee. The fees can be upto 6% where as the normal brokerage fee is not more than 2%. So, look for the fee in the mutual fund first. The mutual funds also contain some hidden fees which normal people like you and me can not see.

No reserve Cash: Some mutual funds use all the cash they get which is not the right thing. The must have some reserve money which it can use in times of adversities.

Very Big Funds: The mutual fund must not be big enough that when it puts money in a stock, the whole price of the stock changes drastically. The mutual fund must be small.

You have no control: You just invest one time and there is no further control over your portfolio. You just can take out your.

Boring: According to me, the mutual funds are very boring. There is no fun. Investing is supposed to be fun. Investing is supposed to be interesting. In mutual funds, you just have to put money and there is no further control.

Mind these faults and you will have good returns.

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