https //iaeme com/Home/issue/IJARM 179 editor@iaeme com International Journal of Advanced Research in Management (IJARM) Volume 13, Issue 1, January December 2022, pp 179 182, Article ID IJARM 13 01 0[.]
International Journal of Advanced Research in Management (IJARM) Volume 13, Issue 1, January-December 2022, pp 179-182, Article ID: IJARM_13_01_019 Available online at https://iaeme.com/Home/issue/IJARM?Volume=13&Issue=1 ISSN Print: 0976 - 6324 and ISSN Online: 0976 - 6332 DOI: https://doi.org/10.17605/OSF.IO/K62GT © IAEME Publication AN OVERVIEW OF CUSTOMERS' BENEFITS OF JOINING MUTUAL FUNDS Yen Bui Thi Dong Nai Technology University, Vietnam ABSTRACT Today, mutual funds play a significant part in investing patterns Everyone nowadays is interested in making investments in many kinds And the majority of individuals prefer low-risk investments The mutual fund has arrived Because mutual funds allow investors to invest a smaller quantity of money and are less risky Most of the time, it delivers a consistent return with no requirement for the consumer to conduct their own market research The consumer only needs to invest a small amount of money with certain specialists, and they can relax without worrying about losing money Because most experts put their money in stocks in which they expect a consistent return The specialists keep a close watch on the industry and are well-versed in this field As a result, most individuals are drawn to mutual funds since they are less risky This article will provide information on mutual funds and their benefits to clients Key words: Mutual Funds, Fund Manager, Diversification, Customization Cite this Article: Yen Bui Thi, An Overview of Customers' Benefits of Joining Mutual Funds, International Journal of Advanced Research in Management (IJARM) 13(1), 2022 pp 174-178 https://iaeme.com/Home/issue/IJARM?Volume=13&Issue=1 INTRODUCTION Mutual fund is simply a collective investment model Accordingly, the capital that the fund holds is usually mobilized from the public After that, this capital will be reinvested in the purchase of bonds and securities If so, the fund's value will go up and down based on the value of stocks and bonds from time to time Therefore, investors need to closely monitor the financial status of each stock when investing in companies operating under such a fund model A fund company can hold hundreds of stocks at the same time This means that investors will give the company a guarantee of capital at a low cost In addition, investors can avoid the risk of falling in the price of the stock code that the fund company has invested in For example, when you invest in Tesla stock yourself, you are sure to incur the entire loss if the ticker depreciates However, if you choose to invest in a mutual fund, the losses will be significantly reduced Because Tesla stock is not the entire investment portfolio of the company, it only holds a small percentage Mutual funds are a favored venture road for a greater part of clients They help in expanding your ventures wherein your investment is overseen by proficient fund directors, and you don’t https://iaeme.com/Home/issue/IJARM 179 editor@iaeme.com An Overview of Customers' Benefits of Joining Mutual Funds need to be refreshed with all the markets happening or invest a ton of energy doing explore on each stock There are heaps of advantages of putting resources into mutual funds The following are the critical advantages of putting resources into mutual funds OPERATING MECHANISM OF MUTUAL FUNDS To have the most accurate view of mutual funds, you need to refer to how this fund model works Based on the opinion of a team of investment advisors and independent financial analysis reports of each enterprise, the securities company will start buying shares At the same time, the fund company can place orders to buy many stocks and bonds, in order to optimize profits or minimize risks for investors Figure shows mutual funds work Figure Operating mechanism of mutual funds The team of advisors must be experienced and knowledgeable in the field of financial investment They also have legal duties when working with securities companies To ensure higher returns than shareholders participating in mutual funds In some cases, the analyst holds another mutual fund at the same time Most fund companies own a streamlined staff In which, most of the human resources team are usually analysts, auditors, managers The role of the researcher and analyst is especially important They have the duty to closely monitor any changes in the market, the net worth of assets currently held by the fund On the other hand, they also have to monitor the movements of stocks traded on major exchanges during the day Each mutual fund company also needs to have its own legal team consisting of several attorneys The main task of the legal team is to provide advice and monitor government policy related to investment BENEFITS OF JOINING A MUTUAL FUND Mutual funds, similar stocks, are exceptionally liquid assets; you can trade shares whenever While stock funds are many times exchanged straightforwardly through the fund and not on a market or exchange, trading mutual fund shares is pretty much as simple as exchanging stocks You can sell your investment quickly and at your own perception https://iaeme.com/Home/issue/IJARM 180 editor@iaeme.com Yen Bui Thi When participating in mutual fund investment, investors will enjoy many benefits such as benefits of diversification, benefits of customization, benefits of custodianship, benefits of affordability 3.1 Benefits of Diversification Probably the greatest advantages of mutual funds are that they permit investors to differentiate their investments absent a lot of exertion Assuming that you put all of your cash in one stock, there is a critical risk of loss if the issuer's performance loses steam If you put resources into an assortment of stocks in various areas, you diminish your gamble; The chances of not all organizations on the double are thin It takes a great deal of research and capital to make the right diversified portfolio when you put resources into the stock market On the off chance that you put resources into a mutual fund, all the guesswork is removed from the situation The prospectus, the annual asset and asset allocation document, lets you know how the fund has been put and the way that it has acted previously Rather than exploring many various stocks individually, you can basically look for mutual funds to achieve your investment objectives 3.2 Benefits of Customization One more benefit of mutual funds is the capacity of fund managers to fit investment vehicles to meet different investor objects and risk resistances Making a customized portfolio to suit your particular necessities as you put resources into individual stocks requires a far-reaching comprehension of technical indicators and a grip of fundamental and analytical analysis Without a strong comprehension of corporate finance, historical volatility and chart patterns, investments in individual stocks often go down more than expected There are four fundamental kinds of mutual funds: bond funds, stock funds, balanced funds, and money market funds Any venture company can offer a wide scope of funds from various classes, making it simple to pick a fund that mirrors your investment style 3.3 Benefits of being Supervised When investing in individual stocks, you are liable for your exploration and exchange execution You should know a reasonable plan on the stock you have picked, and you must also be actively associated with the everyday working of the stock market There a large chunk of change made in swaps or other short-term strategies, however, it expects you to constantly watch out for the graph If you time your exchange wrong, you could wind up passing up on incredible increases – or more regrettable, losing your underlying investment Mutual fund managers all the research, estimations, and exchanging for you, making mutual funds a simple and profitable investment option If you favor a high-performing exchanging style or need steady control over how and when trades are made, you dislike the put-and-forget-it way of effective money management Stock funds offer similar compensations for investment in the stock market, but with a degree of expert direction that most individual investors can’t get to 3.4 Benefits of Affordability Mutual funds normally sell stocks for just $100 and effectively make extra investments consequently over time to grow your holdings Assuming you have $10,000 to invest, you can purchase 20 shares of a stock that sells for $500 per share, or you can buy 100 shares of a mutual fund with a portfolio diversified investment and professional management Additionally, in the event that you trade stocks often, brokerage fees alone can fundamentally decrease your benefits If you have a huge amount of cash to contribute and https://iaeme.com/Home/issue/IJARM 181 editor@iaeme.com An Overview of Customers' Benefits of Joining Mutual Funds know enough about the stock market to get to the point where a few big trades are perfect, you can achieve impressive results in a short period of time with no fees too much However, most investors are not so lucky Since mutual funds leverage the investments of thousands of shareholders, they can restrict investment costs Mutual funds buy and sell securities regularly, making many exchanges each year As a singular financial backer, the expenses caused by that kind of action would be cosmic Notwithstanding, common supports spread the expense of these callings among a huge number of investors, altogether decreasing the expense per individual RULES FOR PARTICIPATING IN MUTUAL FUNDS When investing in mutual funds, you need to pay attention to the following principles: Add more capital to your investment portfolio: There are quite a few investors who mistakenly think that they just need to put some initial capital into the fund, then the fund will invest it for you and make a profit Although the truth is obvious, but if you not regularly pour more capital every month, every year, the return on the initial capital will not be worth much, even with the additional compound interest Choose the right investment fund for your risk appetite: Before deciding to invest, you need to find out if their investment fund is biased towards stocks or bonds or in a balanced direction to choose the right fund suit your investment style Anticipate the risks: In fact, no mutual fund can confidently promise a specific return Because profit or loss depends on market factors So, if your money in a mutual fund goes down, that's completely normal Most importantly, when investing with a long-term strategic vision, the growth rate can reach 15%/year CONCLUSION One thing is for sure, any form of investment does not guarantee 100% safety, they all have certain risks However, funds basically always diversify their investment portfolio, so they also limit risks much more than direct investment Every fund always tries to maximize profits and minimize risks for investors, so it is completely safe to invest in mutual funds Besides, investing is a process that takes time, capital and patience, so you need to make sure this amount does not affect your finances for at least the next few years, even if This study provides an overview of mutual funds and related information, thereby helping readers consider making investment decisions, especially investment decisions invest in mutual funds REFERENCES [1] https://en.wikipedia.org/wiki/Mutual_fund [2] Natter, M., Rohleder, M., Schulte, D., & Wilkens, M (2016) The benefits of option use by mutual funds Journal of Financial Intermediation, 26, 142-168 [3] A Study of Mutual Funds, Reepu International Journal of Management, (3), 2017, pp 213– 219 [4] Elton, E J., & Gruber, M J (2013) Mutual funds In Handbook of the Economics of Finance (Vol 2, pp 1011-1061) Elsevier https://iaeme.com/Home/issue/IJARM 182 editor@iaeme.com ... down more than expected There are four fundamental kinds of mutual funds: bond funds, stock funds, balanced funds, and money market funds Any venture company can offer a wide scope of funds from... enjoy many benefits such as benefits of diversification, benefits of customization, benefits of custodianship, benefits of affordability 3.1 Benefits of Diversification Probably the greatest advantages... of putting resources into mutual funds The following are the critical advantages of putting resources into mutual funds OPERATING MECHANISM OF MUTUAL FUNDS To have the most accurate view of mutual