| A mutual fund is a joint stock that is managed for | | | | case, if one of the stocks loses its value, then the |
| and by the investors who buy into the fund. Such | | | | loss would be just of one stock among many. |
| mutual funds allow the investors to benefit from | | | | Hence the total value of the loss is felt less. |
| a diversified investment portfolio, without him/her | | | | Though diversification of portfolio is a very good |
| having to actually invest a large sum of money. | | | | investment idea, it is not always possible for small |
| A diversified investment portfolio has many | | | | investors to put in so much money. This is where |
| advantages. For starters, it protects the investor | | | | mutual funds help such investors to get the |
| against rapid market losses if any one particular | | | | benefits of a diverse portfolio with only a small |
| stock plummets downwards. Consider an investor | | | | investment. |
| who has as many as twenty stocks. In such a | | | | |