what is a broad market fund?what is the difference between it and stock market?

Answer 1

A broad market fund invests in common stocks of U.S. companies across all capitalization ranges. So it is similar to the stock market except it picks a subset of the whole stock market, not the stock market index. There are mutual funds that invest in specific sectors only.

Answer 2

Stocks are shares in the ownership to a company. When you own 1 share of stock, you own a tiny little piece of that company (unless they've only issued 5 shares, of course). The stock market is a place where people can buy, sell, or trade stocks. The New York Stock Exchange is the biggest one, but there are many other stock markets around the world.

Since some companies are bigger than others, the buying and selling of their shares tends to make up a larger portion of a stock market. More shares of GM trade hands than Hank's Corner Shoe Store, for example. This means that if you invest in a certain number of the largest companies, your investment will automatically tend to track the overall movement of the market. A broad market fund is a mutual fund that invests in these types of companies. Some of these groups have familiar names - the Dow Jones companies and the Russell 500 are two such groups.