What are the benefits of investing in mutual funds?

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A mutual fund is a type of investment created by pooling money from several investors and focusing them all on a specific vehicle like stocks, bonds, money market instruments, and other assets. This kind of investment might be intimidating to some people, but a trustworthy financial advisor will always look after your best interest. Here are some of the many benefits of investing in mutual funds.

As far as investments are concerned, mutual funds are simple and easy to understand. Investing in mutual funds and reaping returns from them does not require a background in investment, economics, or finance.

Mutual funds are also widely accessible. They are offered at almost all brokerage firms, banks, mutual fund companies, discount brokers, and insurance companies. Opening an account doesn't get any easier.

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Mutual funds also have a broad market exposure, making them open to diversification. A single mutual fund can invest in hundreds of different investment opportunities. An option for investors is to diversify into multiple different mutual funds for maximum reach.

Unlike other investments requiring a huge sum of money to start, mutual funds are relatively affordable thanks to their low minimums. A lot of investment firms only require a minimum of $3,000 or less as the initial investment. There are also some cases in which the investor initiates a systematic investment program. In this case, the initial investment can be as low as $1,000.

Delos H. Yancey is the chairman, president, and CEO of State Mutual Insurance. He is a Certified Financial Examiner, a Certified Insurance Examiner, and a fellow of the LIMRA Leadership Institute. For more reads on State Mutual Insurance and their services, visit the company's website.