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What is a mutual fund Mutual Funds a mutual fund is a large pool of money that investors create which is used to buy many different stocks rather than just buying an individual stock Because all these investors have combined their money they can afford to buy many different stocks A mutual fund is managed by a portfolio manager He or she controls all of the investors money and invest it into a group of stocks or bonds and decides how much to invest in each stock A mutual fund has a price like a stock Net Asset Value It tells you how much one share of that mutual fund costs When you buy stock you have to pay a commission However the fees involved with investing in a mutual fund are often much less in comparison There are currently over 6000 mutual funds available to investors and each one has its own unique style of investing Here are some of the funds that you may want to consider Balanced Fund These funds are probably best for conservative investors those who try to minimize their risk These funds often invest in many different stocks and bonds Some balanced funds invest in over 200 stocks By doing this they minimize your risk while also providing fairly stable growth Dividend Growth These mutual funds use a special kind of investing strategy They look for stocks that pay dividends and determine the health of the company by seeing how fast the dividend payments are growing When a company is doing well it often raises its dividends The fund managers look at these as the key factor in deciding which stocks to buy Companies that pay dividends are often large well-established companies Therefore dividend growth funds are fairly safe investments but they also provide quite a bit of growth Capitalization Funds These funds invest in companies whose market capitalization the total value of all of their
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