Chapter 14 (part 2): Extra –
mutual funds
1.
Why mutual funds?
• There are many investment options (cf. chapters 2 and 14)
- Shares (+derivates)
- Bonds (+derivates)
- Currencies (+derivates)
- Commodities (+derivates)
- Real estate (+derivates)
• Each have their own benefits, disadvantages, price, and risks
• Therefore, a good practice is to spread investments over many options
• But spreading risks may be unfeasible for “limited” budgets
• So let’s pool all our money
and hire an expert to invest with the whole pile of money
- Where we keep track of which “share” of the fund is ours
- Where we pay a small fee for the administration and management of the portfolio
mutual funds
1.
Why mutual funds?
• There are many investment options (cf. chapters 2 and 14)
- Shares (+derivates)
- Bonds (+derivates)
- Currencies (+derivates)
- Commodities (+derivates)
- Real estate (+derivates)
• Each have their own benefits, disadvantages, price, and risks
• Therefore, a good practice is to spread investments over many options
• But spreading risks may be unfeasible for “limited” budgets
• So let’s pool all our money
and hire an expert to invest with the whole pile of money
- Where we keep track of which “share” of the fund is ours
- Where we pay a small fee for the administration and management of the portfolio
