Professional money management, diversification, potentially higher returns. . . there are many reasons why investment funds may be the right solution for your retirement plan. Here are five great reasons to consider investment funds when making your retirement decisions.

Professional money management
Like most people, you’re probably too busy to constantly monitor your financial affairs. Since many factors affecting performance are continually changing, investment management is a full time job requiring ongoing study and re evaluation.

When you invest in investment funds, investment professionals decide what securities should be held and at what prices they should be bought or sold. These fund managers have the training and the sophisticated knowledge required to manage large pools of capital.

Diversification
Within an investment fund, the risk is reduced since the investments are spread among many securities offered by many companies in different industries. This diversification decreases the risk of losses which can occur from having “all of your eggs in one basket”.

On your own, diversification can be expensive and difficult. With an investment fund, your money is pooled with many like minded investors. You can benefit from this purchasing power by diversifying through a vast array of equities, bonds, mortgages and money market funds.

Liquidity
A key advantage of investment funds is their liquidity. You can buy or sell fund units on short notice, at a price which you’ll find listed in most daily newspapers. This is important if you need access to your funds unexpectedly although there may be withdrawal charges, you can generally cash in your investment at any time.

Disciplined savings
Most investors don’t have large amounts of money to invest at one time. Investment funds allow you to make small contributions on a regular basis. Many funds provide the option of pre authorized automatic deposits. By contributing on a regular basis, you benefit from fluctuations in market prices. Over the long term, this generally lowers the overall average cost of each unit or share.

Lots of choice
Investment funds are designed to meet the financial objectives of different investors. Based on your individual circumstances, risk tolerance and long term goals, one fund or a combination of funds will meet your needs.


The information provided above is of a general nature only and should not be taken as providing legal, accounting or tax advice. The information is only applicable for Canadian residents. You should obtain your own independent professional advice from your lawyer and/or accountant to take into account your particular circumstances.