Mutual funds are probably the easiest way to invest for people without a financial background. Statista Research Department reported that “In 2019, 46.4% of the households in the United States owned mutual funds.”
First of all, what’s a mutual fund? “Mutual funds are investment funds managed by professional managers who allocate the funds received from individual investors into stocks, bonds, and/or other assets.” — Investopedia
This means the people behind mutual funds do all the work of research and analysis, while you just pay a small fee for their management. Funds are usually balanced every month, quarter, or year based on the previous performance and forecast.
Since mutual fund allocations are public, everybody could easily mimic a mutual fund by just buying and selling the very same stocks in the fund. For example, if you want to invest in the S&P500 without paying the management fee to Vanguard, you could buy shares for all 500 stocks on your own. Every time the fund that you are copying is rebalanced, you just have to buy and sell shares to align your allocation with the fund.
While this could be easy for a few stocks, managing a portfolio of many stocks could be overwhelming. Especially during the rebalancing process, where you have to figure out the changes and buy/sell stocks to be aligned.
Thankfully, Arcade Trader‘s trading platform can handle this challenging task for you. Today we’re going to see how we can use Arcade Trader Free plan to do all the work for us for free. Literally. You no longer have to pay any management fee.