It is undeniable that mutual funds have become really popular nowadays. And this is not without good reason - mutual funds give the biggest return of investments if properly managed. Compared to certificates of deposit and money market accounts which offer really low interest rates, a mutual fund works for its investors in order to get maximum gains.
Investing in a mutual fund is a good way to start testing the waters. Unlike stocks and bonds where you have to learn the ins and outs before becoming really adept with it, with mutual funds all you have to do is wait for your money to grow. The fund manager will be the one responsible for spreading the funds assets over a diverse portfolio of stocks to minimize the overall risk.
To fully understand the concept of mutual funds, it is important that we take a look at its history. Some historians believe that it was a Dutch merchant named Adriaan van Ketwitch who conceived the idea of mutual funds. But others believed that that the mutual fund concept started in the Netherlands when King William I launched his closed-end investment companies.
Despite whoever started the idea of a mutual fund, it was readily acknowledged by France and Great Britain as a brilliant investment opportunity. The mutual fund concept only reached the United States by the 1890s but it was very different from how you know mutual funds today. The first time the modern mutual fund began to take shape was when the Alexander Fund was established in Pennsylvania in 1907. The modifications came in later which included semi-annual issues and withdrawals on demand.
It was only with the establishment of the Massachusetts Investors Trust in 1924 that the modern mutual fund came to be. Roughly a year after the creation of the Trust, it has acquired assets totaling to almost $400,000.00 with 200 shareholders. In 1928, the fund offered its shares to the public. In the same year, another fund called the Wellington Fund was established. It was the first fund to include stocks and bonds as their investment options. Because of this the prices of stocks continued to rise making 1928 one of the most glorious years in mutual fund history.
Not long after came the Wall Street Crash of 1929. This was the worst stock market crash in history, which led to the Great Depression. But one positive thing emerged from these downtimes. Finally, the government noticed the advantage of the mutual fund industry and subsequently passed several laws to protect the investors.
This move was welcomed by the investors and trading in the stock market began to increase again. From then on, the mutual fund industry continued to flourish. Throughout the decades, more and more people become interested in mutual funds with its popularity ever climbing.
Now, it has continued to thrive and has become the most preferred investment option of investors. Mutual funds have truly proven itself throughout the years. Thus, you wont really wonder why a lot of people want to invest their hard-earned money in mutual funds because the industry has great potential to grow even more.
Investing in a mutual fund is a good way to start testing the waters. Unlike stocks and bonds where you have to learn the ins and outs before becoming really adept with it, with mutual funds all you have to do is wait for your money to grow. The fund manager will be the one responsible for spreading the funds assets over a diverse portfolio of stocks to minimize the overall risk.
To fully understand the concept of mutual funds, it is important that we take a look at its history. Some historians believe that it was a Dutch merchant named Adriaan van Ketwitch who conceived the idea of mutual funds. But others believed that that the mutual fund concept started in the Netherlands when King William I launched his closed-end investment companies.
Despite whoever started the idea of a mutual fund, it was readily acknowledged by France and Great Britain as a brilliant investment opportunity. The mutual fund concept only reached the United States by the 1890s but it was very different from how you know mutual funds today. The first time the modern mutual fund began to take shape was when the Alexander Fund was established in Pennsylvania in 1907. The modifications came in later which included semi-annual issues and withdrawals on demand.
It was only with the establishment of the Massachusetts Investors Trust in 1924 that the modern mutual fund came to be. Roughly a year after the creation of the Trust, it has acquired assets totaling to almost $400,000.00 with 200 shareholders. In 1928, the fund offered its shares to the public. In the same year, another fund called the Wellington Fund was established. It was the first fund to include stocks and bonds as their investment options. Because of this the prices of stocks continued to rise making 1928 one of the most glorious years in mutual fund history.
Not long after came the Wall Street Crash of 1929. This was the worst stock market crash in history, which led to the Great Depression. But one positive thing emerged from these downtimes. Finally, the government noticed the advantage of the mutual fund industry and subsequently passed several laws to protect the investors.
This move was welcomed by the investors and trading in the stock market began to increase again. From then on, the mutual fund industry continued to flourish. Throughout the decades, more and more people become interested in mutual funds with its popularity ever climbing.
Now, it has continued to thrive and has become the most preferred investment option of investors. Mutual funds have truly proven itself throughout the years. Thus, you wont really wonder why a lot of people want to invest their hard-earned money in mutual funds because the industry has great potential to grow even more.
About the Author:
The author's website provides information about mutual funds Philippines and explains the history of mutual funds.
