Investment is generally challenging and risky. This is more so for beginners with little or no knowledge and expertise when it comes to what to invest in and how to invest. This challenge has kept a lot of people from investing. It has also caused others huge loses.
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In fact a number of our readers have expressed concern in this regard. "I want to invest but I don't know how to go about it", some readers asked.
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One of the answers to this challenge is what is called "Collective Investment Scheme", or "Mutual Funds".
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Imagine some people contributing money into a pool for investment purposes, and the money is given to somebody or a company which has expertise and professional knowledge (called Fund Manager) about investment, to invest for them.
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The fund manager manages and invests the money in investible instruments (shares, bonds, treasury bills etc.) to make profit for the owners of the money.