How managed funds can save you money

Investing in the share market can be daunting, especially when you are left to your own devices for investing your money.

Take me for instance, I invested a fairly hefty sum of money (for me anyway!) in the share market in 2008. Not long after, we had the big down turn – leaving my shares at nearly 50% of their previous value. I was utterly gutted, I felt so terrible.

It turned out however that the shares I bought would come back up, close enough if not exactly to the cost at which I bought them after 18 months. The problem however is that my money didn’t earn me anything and the worry that I may have just lost all my money was over powering for me. I am obviously risk adverse and not someone who is interested in taking those leaps of faith in my own, internet reading only, understanding of the share market.

This is where managed funds can come into play. Though they can be just as risky as shares, they are typically pooled together with other peoples money and invested in diversified assets by a fund manager.

Someone who actually works the share market and other investment angles for a living. Phew! Doesn’t that sound much better than my leap of faith?

So what are the advantages of managed funds?

1. You don’t need a lot of money to get started. You can often begin with as little as $1K + a regular investment plan.
2. Fund managers tend to have access to international shares, mortgages and other angles of investment that would otherwise be unaccessible to you.
3. Leave it to the pro’s. They do the heavy lifting for you.
4. Depending on your fund, they will diversify your money to ensure you don’t get hit 100% by the share market drops – this really depends on your fund however so best to ask them directly.
5. They help you organise a regular savings plan by which you will invest your money in fortnightly or monthly intervals. This gives you greater investment sums of the long run and helps you by dollar cost averaging. Meaning you are buying into the funds at different rates, sometimes higher sometimes lower, but at the end you will have an average buy in cost that is reduced.

We are interested to know if you have a managed fund?

Tell us which fund you have and how it is going for you by dropping a comment below.

Related Posts

• Managed Funds or DIY Shares

  What is the difference between a Managed Fund and personal investment in Shares? Where do I start with my Investments? Managed Funds VS Share Market.
  These are the kinds of questions that most Australian’s face when looking at ways of investing their money. This article is intended to give you a breakdown of what Managed Funds [...]

• Investment & Stock Market Lingo Simplified

  Sometimes it can really seem as though bankers and financial advisors not only majored in money and finance, but in a language completely removed from everyday-English. It can be really frustrating and a real put off for people who are thinking about getting into investing, especially for first timers.
  Even though your financial advisor can give [...]

• Generate Wealth through Shares with your Savings

  Some people consider investing in shares to be risky, the rich however praise shares for generating their wealth.
  Strategic share investing on the Australian Stock Exchange (ASX) is possibly the most important way to make your money work hard for you, you can invest your money how you wish and generate wealth off the back of [...]

• Super Funds: Long term outlook

  As most of you will know, Australian Super Funds have lost alot of money in the past 3months with all that is going on around the world. This is hard for people who wish to retire shortly as there money is extremely lower then what it should be due to exposure to the risk in [...]

• Stop Living Pay Cheque to Pay Cheque

  Do you find yourself using most of your pay well before the next pay day?
  I did also, and put together a tried and tested method for making sure that I not only covered all my bills and expenses, but left money in my account to be able to have that much needed security until the [...]