Investments in funds? 5 arguments for people who haven't tried it yet

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What do you do with financial surpluses? Are you hiding in a moneybox, or maybe you are holding a bank deposit or savings account? If you haven't been interested in investment funds so far, it's time to look at them!

Investment funds are one of the most popular ways to save and invest at the same time. It is worth noting, especially now, when the interest rate on deposits and savings accounts is record low. These are the most important advantages of the funds:

1. low entry thresholds

Most funds have a minimum deposit amount. Many people avoid investing in funds because of this. Needless to say! In most cases, when purchasing participation units of funds, the minimum payment is only PLN 100. Most investment funds are open to everyone, regardless of profession or wealth of portfolio!

2. a wide range of services

Currently, on the Polish market there are several dozen investment fund companies (TFI), and each of them has at least a few different products on offer. Depending on whether the client is interested in a higher-risk product, e.g. an equity fund, or a lower-risk product, e.g. a cash product, everyone will find something for themselves. The risk of changes in the value of investments, which many people fear in connection with the purchase of participation units in investment funds, obviously exists, but depending on the type of fund it may be high, e.g. in equity funds or low, e.g. in money funds. It should be remembered that each fund employs professionals for whom the safety of funds entrusted by clients is a priority.

3. risk diversification

Do you know what risk diversification means? It is to spread it over several different areas in such a way that it is as small as possible. For example, in the case of financial surpluses, risk diversification means that not all funds are kept in one place. You can diversify your risk by depositing a part of your money on a deposit in one bank, a part on a savings account in another bank, and another part, e.g. in investment funds. Diversification of risk also applies to each fund - there are many different investments under one product.

4. opportunity for profit

When the interest rate on deposits is one percent per year, returns on funds may be higher. Especially over the course of several years, it is worth evaluating the selected funds and comparing their growth rate. Funds, unlike deposits, may have an unlimited growth rate. This means that it may happen that on an annual basis the fund will not earn 5 percent, and even 30 or 80 percent! Unfortunately, the risk works both ways, in case of a bad stock market situation the fund may bring losses. It is important not to panic when the share price falls, but to assess the market situation objectively. Over the months and years, the fund has a chance to improve its performance again.

5. ease of use

Investment fund shares can be redeemed literally at any time. This usually requires waiting a few working days for the funds to reach the account, but unlike a deposit, the client does not commit himself to holding his money in the fund for a certain period of time. This means that even if the money is withdrawn after a week or a month, the client gets all the accumulated capital taking into account the profit (or loss) earned during that time. How to buy units of funds? Investment fund companies sell participation units directly at their own points of sale (also via the Internet) or through intermediaries, most often bank branches or brokerage offices. The fastest way to buy online is by far the fastest. It takes literally a moment and the online operating systems are extremely intuitive!

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