text: Advantages of Mutual Funds\n\n\nThe advantages of investing in a Mutual Fund are:\n\n    * Diversification: The best mutual funds design their portfolios so individual investments will react differently to the same economic conditions. For example, economic conditions like a rise in interest rates may cause certain securities in a diversified portfolio to decrease in value. Other securities in the portfolio will respond to the same economic conditions by increasing in value. When a portfolio is balanced in this way, the value of the overall portfolio should gradually increase over time, even if some securities lose value.\n\n    * Professional Management:Most mutual funds pay topflight professionals to manage their investments. These managers decide what securities the fund will buy and sell.\n\n    * Regulatory oversight: Mutual funds are subject to many government regulations that protect investors from fraud.\n\n    * Liquidity: It's easy to get your money out of a mutual fund. Write a check, make a call, and you've got the cash.\n\n    * Convenience: You can usually buy mutual fund shares by mail, phone, or over the Internet.\n\n    * Low cost: Mutual fund expenses are often no more than 1.5 percent of your investment. Expenses for Index Funds are less than that, because index funds are not actively managed. Instead, they automatically buy stock in companies that are listed on a specific index\n\n    * Transparency\n\n    * Flexibility\n\n    * Choice of schemes\n\n    * Tax benefits\n\n    * Well regulated