Article

A mutual fund is a type of investment strategy made of a pool of money collected from many investors to invest in a variety of securities. Securities can range from stocks, bonds, money market instruments, and other assets. Mutual funds are used as a way to diversify your investment portfolio by investing in a basket of assets. Mutual funds are operated by professional portfolio managers, who use research to decide how best to allocate funds to procure capital gains. Because mutual funds are professionally managed, they are often thought of as a simple way to get into investing — as they take the guesswork out of deciding what to invest in. Mutual funds are also considered to be a less risky investment than buying individual stocks and bonds because even if one stock were to decrease, you still have a pool of other investments that won’t necessarily be affected.