Beginner's Guide to Mutual Funds
Most mutual funds have a relatively _________ initial investment.
Hi, my name is Jon and I'm an independent investor in Kansas City and I'm going to share with you a beginner's guide to mutual funds on About.com. Mutual funds are probably the easiest and most convenient way to invest in the market, while also lowering your risk. A mutual fund is a pool of money from individual investors that is placed in a fund which is actively managed by a professional money manager who monitors a stock or bond in that funds portfolio. Since it is the job of the fund manager to select the stocks or the bonds in the fund it is simply the investors job to pick which type of mutual fund they want without the stress of researching all the different stocks or analyzing financial statements. Every mutual fund has a particular investment strategy, so it may only primarily invest in large companies such as Coca Cold or Exxon Mobile. Some mutual funds focus on specific sectors, like health or energy, and some mutual funds focus on international stocks. In general, since mutual funds are made up of multiple companies in the fund, your risk is spread out of one company under performing. Because of the different investment strategies that mutual funds apply, some will have more risk than others. So be sure to check which ones fit your investment criteria before purchasing shares of that particular mutual fund. If you already have a brokerage account, you can purchase the shares of a mutual fund just as you would shares of an individual stock. First, you would need the ticker symbol of the mutual fund and simply enter the total amount of money you would like to invest. Most mutual funds have a relatively low initial investment, so it can make an ideal starting strategy for those who do not have a lot of money to start investing. Thanks for watching and for more information about stocks and investing, be sure to check us out on the web at money.about.com