# 1. 

Just like Raj pooled his car to meet a common objective, a mutual fund is a professionally-managed trust that pools the savings of many investors and invests them in securities like stocks, bonds, short-term money market instruments and commodities such as precious metals. The mutual fund investors have a common financial goal and their money is invested in different asset classes complying with the fund’s investment objective. Investments in mutual funds need not be big investments rather it entails comparatively small amounts giving retail investors the advantage of having the fund managers who manage the bigger pool of money made with small investments of hundreds of investors.

# 2.

Often investors find it difficult to manage their money on their own. The most common mistake that they make is either they keep their money idle or invest in low yield instruments. Mutual Funds are the perfect investment avenues as they provide professional management, diversification, liquidity, transparency as well as they are well regulated. 

# 3.

Huge pool of money: When investors buy units of mutual funds, they're pooling their money together. Fund Managers use this pool of money to buy the stocks or bond/securities that end up forming one portfolio. Different mutual fund schemes work as different investment baskets of securities. Each basket has its own objective and Fund Manager who basis their investment expertise on each of the stocks take the investment decision.

Market Expertise: While opting for a mutual fund, investors choose the services of experienced fund managers. The Fund Managers are supported by a dedicated research team, who manage the financial decisions based on the performance to meet the objectives of the mutual fund plan. With the real-time access to crucial market information they are able to execute trades on the most effective way.

Continuous Tracking: Fund Managers with the help of Research Analyst keep on tracking the stocks which forms part of the portfolio. The expertise of Fund Managers is unparalleled to a layman investor as in investing it’s very critical to understand when to enter and exit a particular stock.

Diversification: Mutual fund schemes as they have various scrips in their portfolio (normally 25-30 stocks), help mitigate risks to a large extent by distributing investments across various sectors. For e.g. a diversified mutual fund will have stocks chosen from different sectors, similarly a thematic mutual fund e.g. a Pharma Fund will have different stocks who have different growth potential. It is always advisable for investors to invest through the Mutual Fund route who don’t have the expertise to invest in direct equity.

# 4.

With all the expertise on investments provided by Mutual Fund it’s advisable to start your investments via this route. In our next chapters we will explain you the other aspects of Mutual Fund e.g. Systematic Investment Plan, types of Mutual Fund etc 

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