| Mutual funds are one of the most popular | | | | shares. A fund can own shares of different |
| investment vehicles and there is a good reason | | | | corporation and these in turn split further so that |
| for that. Mutual funds require small investments | | | | investors like you and me can invest in mutual |
| and an investor is able to buy a diverse array of | | | | funds. |
| stocks and other financial instruments in just one | | | | All the shares of a mutual fund have a net asset |
| go. | | | | value. So if the net asset value of a mutual fund |
| If you have invested in one or more mutual | | | | is $1 billion then each share of that mutual fund |
| funds, you can be assured that your portfolio is | | | | would be worth $10. It is the responsibility of the |
| well diversified. Diversification is of great | | | | fund manager to buy and sell shares that the |
| importance in mutual funds. If one your securities | | | | mutual fund owns. However, you can also buy |
| perform badly, you will not lose all your | | | | and sell your shares but only at the end of the |
| investment. There are other securities in your | | | | trading day. |
| portfolio to offset the bad one. | | | | Each mutual fund comes with a prospectus which |
| Mutual funds are managed by investment | | | | lists down the types of securities along with the |
| professionals who have a lot of experience in | | | | investment objectives and strategies. You should |
| analyzing and trading stocks and securities. It is | | | | read the prospectus before buying a mutual fund |
| the responsibility of the fund manager to select | | | | so that you know what you are getting into. |
| the securities that a particular mutual fund owns. | | | | Most mutual funds require a minimum investment |
| A mutual fund is made up of stocks, bonds, and / | | | | of $2,500 and this amount can be waived if you |
| or other financial instruments. | | | | make a commitment to regular monthly |
| Just like stocks, mutual funds are divided into | | | | investments. |