| Mutual funds simply are a method through which | | | | any kind of investment: stocks, bonds, |
| people invest. People often asking, "What are | | | | government securities, real estate, gold and other |
| mutual funds paying?" The truth is that mutual | | | | precious metals, international securities, foreign |
| funds don't pay anything! People also say, "I don't | | | | currencies, natural resources, even hedge |
| like mutual funds because they're risky." But | | | | positions and money markets. You can find funds |
| there's no such thing as a "risky" fund. Nor has | | | | that engage in virtually any type of trading |
| anyone ever lost money in a mutual fund. Mutual | | | | activity, including options and futures contracts, |
| funds are not good, and they're not bad. | | | | derivatives, and even selling short. |
| A mutual fund, in fact, is merely a mirror - a | | | | Technically, mutual funds are called "open-end" |
| reflection of something else. Thus, if you invest in | | | | investment companies because they forever buy |
| a mutual fund that invests in stocks, and you are | | | | and sell their shares. In industry jargon, mutual |
| as likely to make money or lose money as any | | | | funds "sell" shares to the public, and when you |
| other person who invests in stocks. | | | | want your money back, the fund will "redeem" |
| In fact, you can use mutual funds to buy virtually | | | | them for you. |