what is a mutual fund?

Answer 1

A mutual fund is a form of collective investment that pools money from many investors and invests the money in stocks, bonds, short-term money market instruments, and/or other securities. In a mutual fund, the fund manager trades the fund's underlying securities, realizing capital gains or loss, and collects the dividend or interest income. The investment proceeds are then passed along to the individual investors. The value of a share of the mutual fund, known as the net asset value (NAV), is calculated daily based on the total value of the fund divided by the number of shares purchased by investors.

Answer 2

A mutual fund is also known as an investment co. Investors invest cash and buy the mutual funds shares at the price it is valued at at the time they receive your money. They take your cash and cash from other investors and buy stocks bonds or any investment that is related to their goals. If the stock go up then the value of your fund shares will go up or down if they loose money. Their are over 2,000 mutual funds all have a different goal. You can reinvest any dividend or capital gain the fund may pay out into more shares of the fund or you can have it in cash. It is best to reinvest it in new shares. If you hold it for a long time at least 5yrs but 10 yrs is better and you add to it over the yrs. you can make a lot of money. This the best way for some one to invest. Find a no load fund which means no commissions and invest in it. Vanguard funds are good and have a low expense, This is good because you keep more of the profits. A no load fund makes it money by charging a management fee which comes out of any dividend or gains they make for you, then you get the rest after that. Go to Vanguard .com they will help you.