President's Choice Financial|accounts and products|mutual funds|the basics of mutual fund investing

CIBC Securities Inc. — the mutual fund advantage

Here are some of the key benefits to investing in mutual funds:

professional investment management:
Typically, only investors with large amounts of money are able to access the expertise of professional investment managers on an individual basis. Mutual funds allow you to benefit from the skills of professional investment managers, with only a modest investment generally required. In addition, by pooling clients’ money, mutual funds have potentially increased purchasing power, and so may have lower transaction and other investment costs than those incurred by most individual investors.
diversification:
When you invest in a mutual fund, you’re actually buying an interest in the many different investments that the fund holds. This diversification reduces your overall investment risk, as a decline in one investment in the mutual fund may be offset by the strength of other investments in the fund. Most individual investors cannot readily match the level of diversification available through a mutual fund.
potential for long-term growth:
Inflation can erode the value of your savings over time. However, if you hold a mix of mutual funds in your portfolio, with at least a portion in equity funds (which are higher risk investments), you may benefit from the long-term growth potential that equity funds can offer, while attempting to protect yourself from inflation. It can take some discipline to ride out the inevitable ups and downs of the markets, but those who do may have the greatest potential to gain over the long term.

a word about risks
Some mutual funds have very low risk. Others have relatively high risk, but even then, they are generally less risky than individual shares of a company. As mutual funds own different types of investments, the value of these investments will change from day to day. As a result, the value of a mutual fund's units may go up and down, and the value of your investment in a mutual fund may be more, or less, when you redeem it than when you purchased it.

professional investment management:

diversification:

potential for long-term growth: