Mutual Funds

Investing in mutual fund is easy but the Filipino investor should read the fine print first before any money is parked in mutual fund. It is a common mistake for those without background in Finance that they think Mutual Fund is only for the rich but the reality is it is the most suitable investment for the common man as it offers an opportunity in diversified securities at a lower cost.

A mutual fund is an investment company that pools the funds of individual investors to form a massive asset base and the money is invested by a professional fund manager.

The income earned through these investments are shared by its share holders in proportion to the number of shares owned.

There are many advantages of mutual funds but the foremost are liquidity, diversification and tax exemption benefits.

My tip is to parked your money for 7 years since it grows over time.

Mutual fund is the best medium for retirement and college education.

Since mutual funds qualify as securities and not deposits, they are not guaranteed, their values change frequently and past performance may not be repeated

However, fund managers and the funds themselves operate under strict securities regulations. For example, mutual funds are owned by the shareholders and are separate legal entities from the companies that operate them.

In the Philippines there are only few kinds of mutual funds namely:

1. Stock or equity fund
2. balanced fund
3. fixed income
4. money market

Those who are in their 20's and late 30's I advised that you invest in stock or equity mutual funds because time is on your side.
For the 40's and 50's balanced funds are the best and for the near retirement fixed or money market.

Browse www.icap.com.ph and choose mutual funds that fit your taste. In my case, I am inclined to First Metro Save and Learn equity and ATR KIM ENG equity.

You can invest online therefore take advantage of it and you can monitor your investment by checking the Net Asset Value (NAV) at Business World Newspaper or the website of your chosen mutual fund company.

Remember, mutual Fund will make you earn provided you have the patience.

Good luck.

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