what are mutual funds and are the a good investment?

Answer 1

For a 'textbook" answer go to the web-site of Kiplinger or Morningstar...maybe yahoo/finance, or moneycentral/msn.
But in plain English a fund is managed by an investment company ( Fidelity, Vanguard, etc) it invests the money that people pay into it into various different parts of the stock market.
It can invest in big companies (large cap) small companies (small-cap) or in between ( mid- cap) or in all three( blended).
It can invest in certain fields...retail stores, drug companies, construction companies, hotel & resorts ( the different areas are called sectors and theres about a hundred different groupings)
It can also choose to invest by " country" or area of the world....
When you pick a fund, that is what you look into ( research..at those same sites I mentioned above)
Now...your important question...good investment?
They are THE one single way an average person can get into the economy of this country( or others)....and that is how most wealthy people GOT THERE....in the markets, or in Real Estate.
(...and you can buy funds devoted to Real Estate)
Very few "savers" will ever match inflation, let alone beat it...the funds give you a chance.....money left alone in the bank will never add up to money left in funds.
There are " risks" and there are UP and DOWN periods...but even a conservative " balanced" mutual fund will grow to a very respectable nest egg in most cases.........the people that you hear or read about who " lost their asses"...they were chasing big, new ideas and tech hotshots, and big returns ( and things didn't pan out.) But someone who just invests in the companies that make America and the world keep going...basic stuff..necessities, materials,insurance, etc.... they make a little money ( over and over and over)

Answer 2

A mutual fund is an investment company that continually offers new shares and buys existing shares back at the request of the shareholder and uses its capital to invest in diversified securities of other companies. They are not a wise investment unless you spend lots of time researching them. I guess I can't say they aren't a wise investment, because they can be. But is imperative you understand them, the risks involved and how they work.

Answer 3

I congratulate on your determination to start making an investment. i think of the quicker you commence the extra suited this is. although, i'm no longer a huge fan of mutual funds. For as quickly as, various the mutual funds will lag in the back of an index fund after factoring in for administration expenses. 2nd, i think of you may desire to do a miles extra suited activity making an investment for your self rapidly in the inventory industry provided you have performed adequate examine. So i could say, index funds are the perfect thank you to pass when you consider that they provide extra suited returns than mutual funds. in the advise time, examine examine examine to make certain extra with regard to the inventory industry. undergo in strategies, the inventory industry is the sole industry the place shoppers run for the exits while there's a sale (refering to the corrections, drops, etc). So being a contrarian could earnings you.