what is mutual fund?

Answer 1

A mutual fund is a group of investors operating through a fund manager to purchase a diverse portfolio of stocks or bonds. There are myriad kinds of mutual funds, each with its own goals and methodologies. Whether or not a mutual fund is a good investment is a matter of much public debate, with many claiming they are excellent for the average person, and others saying they are simply a poor way to invest.

A mutual fund may be either an actively managed fund or an indexed mutual fund. Actively managed funds are changed on a regular basis by a fund manager in the attempt to maximize their profitability. They fund manager looks at the market and the sectors a fund invests in and redistributes the fund accordingly. An indexed fund simply takes one of the major indexes and buys according to that index. Indexed funds change much less frequently than actively managed funds, but in theory an active fund has more potential for profit

There are more types of mutual fund available than there are publicly traded stocks, making the process of choosing one a somewhat daunting prospect for most people. In general, it is good to look at a few types of mutual fund that catch your eye and investigate them to see if they fit your needs. The length of time you want to remain invested, associated costs, tax status, and whether a fund is closed- or open-ended may all prove important.

The sector of investment for a mutual fund may also be something you want to look at. Many sector funds exist, and they are most often the top-performing mutual funds in a given year. The problem, of course, is guessing which sector will next see uniform growth, and avoiding sectors that can be hard-hit by single events, such as transportation.

Many people may also want to consider mutual funds which have specific social agendas, in addition to making a profit. A number of environmentally-friendly mutual funds exist which only invest in companies that meet certain best-practices criteria. Mutual funds based on other social views, political slants, and religious inclinations also exist.

Whichever mutual fund you ultimately wind up using, it is important to stay diversified. Having some money in long-term funds and stocks, with some in money-market funds and bonds, is always a smart way to plan for the future and any bumps that may occur in the market.

Answer 2

A mutual fund is a basket of eggs (stocks) of different birds (companies) so that even if any of the species is not laying enough eggs (company not performing well) the others will fill the gap (other companies should perform ok).

The idea of mutual fund is reducing the risk of losing money in the stock market by compromising the amount of profit.

However, if a storm (inflation, deflation etc)hits that destroys the habitat of all the species (broad market crash) then you still won't have enough eggs in the basket.

Answer 3

1. A mutual fund is an investment fund that is made up of a pool of funds collected from many investors like you for investing in securities such as stocks, bonds, money market instruments and similar assets.

2. Mutual funds are operated by professional managers, who invest the fund's capital and attempt to produce capital gains and income for the fund's investors.

3. Investing in a Mutual Fund can be a lot easier than buying and selling individual stocks and bonds on your own.

4. Investors can freely sell their holdings when they want, subject to exit loads prescribed by the fund

Answer 4

When you want to invest money in stock market and doesnt have either enough knowledge on the same you can invest in mutual funds.A portfolio manager of the mutual fund company will invest your money in diversified stocks and give you certain number of units representing your total amounty invested.when the money invested by portfolio manager generates profit, the value of your units increases.Thus the profit from shares is reflected in the units held by you.Youi can sell those units when it s value increase to a significant level

Answer 5

it is a portfolio. mutual fund means a investment company will collect money from different small & large investorsi;e from individuals, company. etc and reinvest in different shares securities & stocks of different companies.we r the small contributors and we will get some % of profit earned by the investing company if it do well otherwise we may loose some money also,

Answer 6

its actually pooling ur funds into various companies so that ur risk involvement becomes much lower comparing to investment directly on stocks of one company....there are various portfolios like balanced ,Growth etc . Companies like ING Vysa,Meryl lynch,PNB paribas, tempelton etc

Answer 7

In short , it is an investment into one or more companies. You may win or you may lose........you get a percentage of their profits but if they do badly......
A bit of a gamble.......pharmaceuticals are the best in my humble opinion.

Answer 8

i think it is a portfolio which contains various stocks