What is a Mutual Fund?

Posted on December 31 2008

Whenever you contribute money to the fund, you own a stake in all its investments. Most funds allow you to begin investing with as little as a thousand dollars. Investing in a Mutual Fund is a great way to gain a diversified portfolio without buying individual stock in a single company. Another benefit is that you don’t have to manage the individual stocks and holdings as this is the fund manager’s job.

Things to consider…

• There are different levels of risk associated with each Mutual Fund.
• If you consider investing in a Mutual Fund be sure to research the fund’s prospectus and shareholders report to learn about the funds investment strategy and it’s potential risks.
• Funds with higher rates of return may take on risks that are outside your comfort level.
• Consider working with a financial advisor that has a proven track record and shares your same values.
• Investing in a mutual fund carries risk. Markets go up and down so you do have the potential to loose some or all of your money.