| A mutual fund is a collection of stocks and bonds | | | | percentage of the fund’s net assets. The final |
| that are combined into a pool, which are | | | | type of fee is the best one of all, it is the |
| purchased and sold. By pooling these investments | | | | payment of no fee at all and is commonly called |
| you are risk managing the losses that some | | | | the no load. Obviously this is a good one to shop |
| stocks or bonds may have with gains made by | | | | around for and to select if the fund also has a |
| others. This is basically protecting you from having | | | | good track record of providing good returns. |
| all your eggs in one basket, which is a high risk | | | | There is a choice of the types of funds to invest |
| strategy. | | | | in. There are the standard stock funds that are |
| Mutual fund managers have the responsibility to | | | | issued by companies. The bonds funds are just |
| manage a mutual fund. When you invest into | | | | that, the purchasing of issued bonds. Sector funds |
| these funds you are buying a part of the stocks | | | | are target at specific parts of the economy, such |
| and or bonds that an investment has been made | | | | as financial, industrials, mining and the like. |
| in. Due to the size of these funds, your | | | | International and global funds are as the name |
| investment will only form a small percentage of | | | | indicates, investments made outside of the United |
| the overall size of the investment. The decision on | | | | States. Balanced funds enable the selection of |
| what stocks or bonds that the mutual fund buys | | | | stocks and bonds, which is a more risk adverse |
| and sells is determined by the manager. These | | | | approach. Index funds are aligned to stocks of a |
| managers charge a commission and sales fees | | | | particular type of stock indexes. You probably |
| which you will have to pay for. The structure of | | | | heard of these reported quite regularly as the |
| these mutual funds often falls within four | | | | Dow Jones Industrial average, or another |
| categories. When you pay a fee at the beginning, | | | | common one is the Standards and Poor’s |
| this is called a front up. A back end is when you | | | | 500. These are a collection of stocks that make |
| pay when the shares or bonds are sold. When | | | | up these stock indexes. Your investment in index |
| there is a payment of a fee on a regular cycle, | | | | funds is only with the stocks that are included in |
| like the annual fee, it is usually based on a fixed | | | | these fund indexes. |