Mutual funds investment is popular right now because the easy way that could access through online. Nevertheless, this type of investment has some disadvantages. Even the instrument its own benefits and losses, it is better knowing the disadvantages first you could face in the future.
Here are 7 Disadvantages of Mutual funds investment:
1. Investment Loss
There is a possibility that you can lose in the investment. Mutual funds investment loss does not have zero risks. The risk can be low, medium or high depends on the choosing instrument
2. There Is Sum of Money
Compare to buy your own stock, Mutual funds investment has higher fund. The fund includes Mutual funds product purchase until management fee by investment manager.
3. Fluctuating Result
Nobody can guarantee of all returns of investment from Mutual funds or other investment instruments. The profit you gained from last year could not happen again this year. It could be the investment would not return anything because of the market condition at that time.
4. Disbursements of Fund Have Longer Time
Unlike saving, Mutual funds investment needs 3-4 days since the bidding has given until the fund in the account. Because the investment has bigger return, the liquidity does not stable as saving. Some cases of returns could not search for because the manager failed to give fund for the purchase of Mutual funds unit.
5. You Do Not Influence on Decision Making Process
Because all fund run by investment manager, they have the decision such as stock selection according to potential MI. You cannot contribute to the decision making process. You could only decide to trust your entire fund to investment manager.
6. Possibility of Closing Investment
If the managed fund on the minimum number, there is possibility authority will close your Mutual funds account. Moreover, this case is very rare but is possible even the number is so small.
7. Choosing The Wrong Investment Manager
Choosing investment manager is crucial remembering you should trust your entire fund run by MI. There is chance your manager won’t operate its duty to make your investment not work properly until you could lose your money.
For that reason, try to choose the correct person for the manager and do not need to rush. Find the best investment manager who has an impressive portfolio.