Mutual funds have been around for hundreds of years and are still going as strong as ever. This longevity and popularity must mean that there are good reasons to invest in mutual funds. Here we look at five of those reasons.

1. Diversification. For me this has to be the top reason for using mutual funds. You do not need a lot of money to get the diversification that people with larger sums are able to achieve. With your small investment you can access shares, bonds, property and fixed interest. Your dollar is working hard for you by even having access to international markets.
2. Regular drip feed. You can set up a regular automatic transfer of funds through the mutual company. This can be done for as little as $100 a month so you don't need a lot of money to do automatic transactions. In this way you can set the deduction as part of your budgeted expenses and just set and forget. Purchases of units are made on a regular basis regardless of whether the markets are up or down and it makes budgeting easy.
3. Professionally managed. People who are educated in investing strategies do all the complicated market research. This is their job and they are on the spot to make decisions if markets are in turmoil. The managers have access to market information that you and I would not be privy to. They also have access to resources and international managers that many of us would not.
4. Dollar cost averaging. This is a strategy of investing on a regular basis over a specific period of time and is an offshoot benefit of the regular drip feed of your investments. By investing in this way you buy more units when prices are low and fewer units when prices are high. The point of this strategy is to lower the total average cost per unit of the investment, giving you a lower overall cost for the units purchased over time. The strategy works best with volatile markets. When markets are down, celebrate! Your money buys more units!
5. Access to your funds. In normal circumstances your funds are available within a week or less. This is an advantage if you have an emergency and require the funds at short notice.

Although mutual funds have had their critics this pooling of funds style of investing has many benefits, particularly for investors who have limited resources. Anyone can invest in mutual funds and reap the benefits.