What is a Mutual Fund? Many investors' $$$ are pooled together and managed by a professional investment company. This offers an investor broad diversification. The investor is not buying just one stock but is buying hundreds of different stocks, or hundreds of different Bonds. The investor has control of what type of investment the mutual fund manager can buy. If the fund were a Bond fund the manager may only buy Bonds of a certain quality or in a certain area. If the fund were a stock fund the manager may only invest in stocks of a certain size, quality, rating, or location. The really neat thing about a fund is that you can compare one fund manager to another thereby consistently picking the managers that have performed the best. Typically small amounts of money can be invested in a Mutual Fund, $100 per month or less. This is not typically cost effective with stock. Many types of Funds are available: Stocks, Bonds, Gold, Aggressive, Conservative. There is a Fund for every Investor. |
