Why do investors purchase mutual funds instead of purchasing stocks, bonds, or other investments on their own?

Question

im just curious lol?

Answer 1

Investors invest in mutual funds to diversify in many different ways. A well diversified portfolio has many different types of investments, ETFs, mutual fund, individual stocks, bonds, etc, invested in many different sectors. Having mutual funds diversifies the type of investments you have but also the sectors which you are invested in. A diversified portfolio protects your wealth by putting your eggs in more then one basket.

Answer 2

Their lazy. Did you know that 80% of mutual funds under perform the market?

Answer 3

Diversification, which means less risk.  Your money spread across a lot more stocks and bonds in a mutual fund.  Professional management.  Mutual fund managers have more resources and access to more information than individual investors.  Power.  By virtue of owning more shares of a stock mutual funds have more power to influence decisions on shareholders behalf with their proxy votes.

Answer 4

A couple main reasons.  They get the benefit of the expertise of the fund manager, so don't have to do their own research or watch things as closely.

The other big reason is that a mutual fund allows you to diversify your holdings without having huge sums invested.

Answer 5

cause they don't know any better.  they like to pay the management fees when they could save that for themselves.

if you have 100,000 and 1% of that is 1,000 (management fes)

1,000 can pay for a lot of transactions every year. if you buy and hold, you can save that money.  

warren buffet believes in focus investing with 8-10 stocks or so, but you can probably hold around 15 assets for sufficient diversification

Answer 6

investors mostly purchase mutual funds because it is not risky.like when stock market crashes than the value of your share also decreases but in mutual funds you are assured that you will get an increased amount of you investment.like you have invested 100000rs in mutual funds and the interest rate is 12% than you will get 112000after three years(year may vary according to different mutual fund companies).

Answer 7

Diversification.  Less risk.  "Don't put all your eggs in one basket."

Answer 8

I believe it is mainly for diversification. But there are superb mutual fund money managers out there that can consistently beat the market. They tend to provide better stock selection and timing than individual investors. Check out this site called Fund Mojo that have built out a methodology to analyze tons of mutual funds and find top 2% mutual fund managers who can consistently beat the market for 5+ years at a fee and risk.