Investing - Investing Basics: Investing in Mutual Funds - AOL Money & Finance

Investing - Investing Basics: Investing in Mutual Funds - AOL Money & Finance:


Two significant benefits of investing in mutual funds are diversification and lower transaction costs. By investing in the securities whose prices do not move together, the fund achieves a level of diversification at a lower price than what you would pay to diversify with individual securities. Mutual funds often manage billions of dollars for investors. Their size allows them to spread out brokerage commissions and other transaction fees, or even negotiate lower fees. This results in lower transaction costs for you.