Mutual Funds

A mutual fund is an investment company with pooled money contributed by hundreds of thousands of different investors. The money is used to construct a diversified portfolio of investments in bonds, stocks, short-term money-market assets or some combination of assets and securities. Each share you own of a mutual fund, represents your proportionate ownership interest in the fund’s holdings (portfolio) and the income generated. The majority of mutual funds require a minimal investment amount to get started, ranging from $200 or $300 to a few thousand dollars.

Fund Characteristics

Mutual funds have a few characteristics that distinguish them from other types of investment companies. Shares in a mutual fund are bought directly from the fund manager or a broker, rather than an exchange, like the New York Stock Exchange. The price you pay for mutual fund shares is called per share net asset value, plus any applicable fees imposed at the time of purchase. Mutual fund shares are redeemable, which means you can sell back your shares to the fund, and shares are generally sold on a continuous basis to accommodate new investors. Lastly, the investment portfolios are usually managed by investment advisers who are registered with the U.S. Securities and Exchange Commission. Mutual funds offer a very affordable investment vehicle, with relatively low dollar amounts necessary for initial purchases, subsequent purchases or both.

References

Resources

More Like This

How to Join a Mutual Fund

Risks of Mutual Funds

Mutual Fund Prospectus Delivery Requirements

You May Also Like

Mutual funds can be a smart investment, especially if you are just getting started. Mutual funds work by combining the money of.

One of the most attractive things about mutual funds is that they give the small investor a chance to invest and enjoy.

Investing. Building Wealth; Balancing a Portfolio; Managing Your Money; More eHow. home; mom; style; food;. How Do I Insure Funds in.

How Much Money Can You Invest in Mutual Funds? How to Invest in Vanguard Mutual Funds. Even if you are a new.

Mutual funds are an excellent way to earn money for the future. They're a pooling of the money of many investors, which.

Why to Invest in Mutual Funds. There are many ways to invest your money, but mutual funds can be a good choice.

A mutual fund can be a good investment, but it is not a sure thing. You can make a lot of money.

Investing. Building Wealth; Balancing a Portfolio; Managing Your Money; More eHow. home; mom; style;. State sales tax helps fund state government.

Should I Invest in ETFs or Mutual Funds for a Roth IRA?.

401k plans are deferred compensation accounts intended to hold retirement funds only. Regular bank. money-market mutual funds. you leave the.

How to save using a Mutual fund and Savings account. A penny saved is a penny earned.. Mutual Funds & Saving.