Mainly because few people have the resources it takes to amass broadly diversified portfolios on their own much less the time and expertise it takes to manage them effectively. As shared portfolios, however, mutual funds offer key advantages for novice and experienced investors alike. Professional management Mutual funds like TIAA-CREF s are run by a team of professional managers who research, analyze, buy, monitor, and sell securities to meet investors goals. While large institutions or very wealthy individuals can afford to hire their own money managers, mutual funds make the same expertise available to everyone. Diversification Mutual funds are often diversified across a wide range of holdings, which means they can offset losses from any single investment with gains in others.
Diversification can reduce volatility while keeping returns positive over the longer term.
As a mutual fund investor, you can buy, sell, or exchange shares on request. The value of an investment in a mutual fund will fluctuate. Although mutual funds are regulated, they aren t guaranteed or insured by any government agency.