Do you know how Mutual Funds work?

Well to answer your question a mutual fund is a company or different companies that take money from investors and invest the money in stocks, bonds, money market investments and other types of investments. One thing you should know about Mutual funds and be aware of is that is not guaranteed or insured by the FDIC or any other government agency so its real risky. So if you buy through a bank and the fund carries the banks name you can lose money investing in a mutual funds so before you start investing money on this be real aware of the different things.

Mutual fund is a company that pools investors money to make multiple types of investments, known as the 'portfolios'. Stocks, bonds, money market funds are examples of such type of investments that may make as mutual fund. Mutual funds are managed by professional investment manager who buys and sells securities for the effective growth of the fund. As a mutual fund investor you will become a 'shareholder' of the mutual fund company. When there are profits, you will earn dividends and when there is losses your shares will decrease in value. Since the fund managers compensation is based on 'how well' the fund performs, by which you can be assured they will work deligently to make sure the fund performs well. Managing their fund is their full time job and it is their hard work and effort to make in porifitable. There are few more terms you need to know. A nominal charges like load charges, open end terms and so many other associated terms are there. If you are really interested, you can approach a mutual fund company and get the approprite guide lines from them. Also, mostly they are goes in profit and many are doing in mutual funds. You need not worry about the selling and purchasing side. As long as the fund managers are experts and dealing with highly professional people, they do well with maximum profit. If they make profit, then only they can survive. And they will invest the main accumulated fund in different portfolios o the investment categories. Even if one sector is donw, others may up. So that a balanced or higher side growth is expected in the long run period. Regards, Thank-s

A mutual fund is a legal entity designed to invest a set amount of funds from a group of investors. This usually has to have a prospectus describing their investment styles and the regulations of the fund. They are very popular and are several thousand available to choose from. In general, the average mutual fund will give you a better rate of return than a CD or Government bond. The problem is though because Mutual funds are considered an investment as opposed to a loan ( which is what a bond is), you can loose money on them. While not common this does happen. The most important part in investing into a mutual fund is determining how much risk you want to take. The riskier the fund, the better return you should receive. Classic investing would say to invest in a series of funds with different risk levels. That way you should be able to maximize your investment. Funds are rated much the same way bonds are. In general, bond and gold funds are considered the safest while real estate and foreign market the riskiest.