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Mutual Funds

  1. A mutual fund is simple and easy to use.
  2. A mutual fund is a means of investing in common stocks of companies that enables individuals to share the risks of investing through diversification among many companies. All contributors to the fund own an equal share of gains and losses resulting from the changes in stock prices.
  3. A mutual fund pools money from hundreds and thousands of investors to buy a portfolio of stocks, bonds, real estate, or other securities, according to the investment goals of the mutual fund. Fund managers hired by the mutual fund company are paid to invest the money that the investors have placed in the fund. Read more at the Mutual Funds Resource Center.
  4. You can choose from a great diversity of mutual funds, such as government bond mutual fund which is lower risks all the way to a hedge fund which is considered higher risk.
  5. A mutual fund's return is the rate of increase or decrease in its value over a specific period of time.
  6. By participating in a mutual fund you can be part of a diversified investment that would be much more difficult to create on your own because of the amount of capital needed.
  7. Transaction costs are lower than if you build a portfolio individually because a mutual fund divides the cost among the investors.
  8. In a mutual fund you will get professional management of your money, where generally people with more expertise than you will handle your investment.
  9. Managers are not responsible for fund losses based on their poor allocation of resources. It’s like letting someone else drive your car. Therefore, mutual fund managers must be proven investing experts over time.

Mutual Fund Investing



Using the links below you can learn more about these advantages and disadvantages, you may also learn about what a Mutual Fund is, how it works, risk characteristics and more.

Want to learn more about mutual funds? Check out the Mutual Center - The Motley Fool to learn more.

All About Mutual Funds- What they are, history, how they earn money, professional management, ranking, others.

Learn about The Mutual Fund Advantage and the 20 Major Advantages of Investing in Mutual Funds.

Questions You Should Ask Before You Invest in a Mutual Fund.

Things to know about mutual funds - what it is, different types of stocks and bond funds, choosing bond and stock funds

Personal Financial Tips

  1. Pay your bills on time.
  2. Eat more at home and less out.
  3. Take your food to work.
  4. Forgo the ice cream store and pop popcorn at home.

More Financial Tips