Do you want higher returns on your savings but investing by yourself is not an option? Invest in an investment fund! Read more about it here. With an investment fund you can let someone else invest your money. When you do it right, you do not have to invest your personal time and you will still make a decent profit. But how does trading in an investment fund work and where can you do this?
How does trading in an investment fund work?
Investing in an investment fund is simple. All you have to do is decide is which investment fund is the best one for you. Once you’ve figured that out, the only thing you need to do is deposit the minimum amount required by the fund and consequentially your money is invested!
With an investment fund you receive so-called holdings. The fund invests the deposits of all its clients and divides the proceeds amongst all participants by ratio. You get a part of the proceeds that you are entitled to and this amount is usually reinvested automatically.
Once you have found an investment fund, it isn't that hard to start earning with investments!
Choosing a fund
Investing through an investment fund isn't necessarily easy. You need to choose your fund wisely. The choice you make has a large impact on your results. Therefore it is very important to choose a fund that suits your trading goals.
When selecting an investment fund, risk and profits are important factors to consider. Profits are very important, as we all want to earn money. We certainly don't want to put our money in an investment fund that will lose money.
No investment is without risk though, and it is important that you don't lose sight of this fact. Before you start investing in an investment fund, you also need to look at the ‘drawdown’, which is the maximum amount that the fund has lost. It is also wise to look at the performance of the fund during the financial crisis of 2008.
Is investing in an investment fund interesting?
Whether or not investing in an investment fund is financially interesting completely depends on your personal situation. If you select the right investment fund, you will definitely make more money compared to saving your money in a savings account. It would therefore not be a bad idea to put a part of your savings into an investment fund.
A downside of investment funds is that they usually have high transaction fees. The funds need to be managed and a part of the profits go to the manager of the fund. This is part of the reason why the profits are a little lower compared to a situation where you would have invested the funds yourself. While it is more profitable to trade by yourself, it is also more difficult.
If you want to start trading yourself, you should try it out first through a demo account. With a demo you can test all the possibilities without any limits and without any of the risk. Click here to see where you can test trading completely free >>