Mutual Fund Diversification

Simply put, diversification means not putting all your eggs in one basket. This is especially important in investing. Through porper diversification, losses in one investment can be off-set by gains in another. In the process, overall risk is minimized. Investing in a mutual fund provides you with immediate access to a diversified portfolio of funds. By virtue of the size of the pool of funds, the mutual fund is able to purchase many different investment securities and diversify.