1. 1. Portfolio diversification: Elders have always told us Do not keep all eggs in one basket ; in other words keep your investments in different investment baskets i.e diversify. Diversification means spreading out money across many different types of investments. When the value of one investment is down, the value of the other might go up. Diversification of investment holdings reduces the risk tremendously. That is what mutual funds do. Mutual funds invest in various securities, thus, as an investor you will be able to have a diversified investment basket, and hence increasing the security, thereby reducing the risk.
   2. Liquidity: Just imagine that its your daughter’s marriage for which you have been investing for a long and the investment has been giving good returns as well. However, on the day you require it, you are not able to get your money back. High returns are of no use if one can’t use the funds. In fact we all want the money when we require. This is called liquidity as we want our savings to be available to be withdrawn whenever required. This is exactly what a mutual fund provides- liquidity.
   3. Less risk: As discussed earlier, diversification reduces risk to a large extent. However, even when the fund manager takes a decision on whether to buy or sell any investments, the first thing that they try to see is the risk and then the returns. Compared to any other direct form of investments, due to the concept of pooling, the risk is spread out and reduced to a large extent.
   4. Low transaction cost: We all understand that whenever we buy anything in wholesale, we may get better rates as compared to retail rates. Thus, so many people pooling in their savings and giving the mutual fund to transact on their behalf, gives mutual funds a great power of bargain and thus reducing the overall transaction cost that we would have to accommodate had we done it ourselves.
   5. Professional management: Do we cut our hair at home? The answer is obviously No. We go to a barber who is an expert, a professional in cutting hair, as we all understand that a hair dresser can do a far better job than us. Similarly, in mutual funds your money should be managed by a professional fund manager who will have an expertise in managing funds backed with sound research and understanding of the trends.
   6. Choice of schemes: We invest for various reasons; some might be doing it for buying a house after a few years or daughter’s marriage ten years from now or maybe one’s own retirement which would be twenty years away. However as the objective of investment is different, one- size- fits- all philosophy will not work. Thus, depending on the investment objective, one can choose from a bouquet of mutual fund schemes.
   7. Transparency and safety: Whenever you are handling over your savings to somebody, wouldn’t you want to know what is happening with your money? Of course, you would want to know! As it is your money you have all the rights to know about it. In case of mutual funds, the money is being handled by professional fund managers, the system is extremely transparent. In other words, you will have an exact idea where your money is going. This transparency will automatically give you an added feeling of safety. Due to the transparent system you will come to know about all the things (like where your savings are being invested, how much of it is invested etc) and if you are not comfortable, you can withdraw your savings and thus safeguard it as well.
   8. Flexibility : Everybody does not have the same pattern of earnings and spending. The income flow, in case of a businessman and a salaried person would be different. Thus the investment vehicle/ basket should also be flexible and allow an investor to invest as per one’s income flow. The same is true in the case of requirement of money. As discussed earlier, people with different investment objectives will want to withdraw money accordingly. For example, one might be saving for retirement: however an unexpectedly large medical emergency at home might force him to withdraw money immediately. At that moment investments should be flexible so as to meet the requirements. Mutual funds provide flexibility during investments as well as during withdrawal, thus making it the right and the best choice for you.

If you see one major plus point which is emerging out of many points mentioned above is the convenience at every stage. In other words, right from the time you decide your goals, to actual investing, during the time you are invested to the time you require your money, at every stage, your convenience has been taken care of.