A mutual fund is a pooled investment. When you buy shares in a mutual fund, you are buying shares in a professionally managed portfolio of stocks, bonds, or other securities.
Picture a collection of stocks, bonds, or other securities that are purchased by a group of investors and then managed by an investment company. That's a mutual fund. When you buy a share in a fund, you're really buying a piece of a large, diverse portfolio. Conversely, stocks are shares of a single company. When it comes to managing an investment, some investors prefer leaving those details and skills to someone else.
Often, mutual funds belong to a "mutual fund family." You may be able to shift your investment among different types of mutual funds, often with no more than a phone call. That way your portfolio can easily be tailored to suit your financial situation and your expectations about the market. However, transfers among a fund family are considered sales, which may result in paying capital gains taxes if the fund being sold has appreciated.
Mutual funds make managing your portfolio very easy. Periodic statements will fill you in on the performance of your mutual fund, transactions within your account, and more. You'll also be kept informed about the taxability of your distributions.
There are thousands of different mutual funds offered on the market. They range from funds that include a broad variety of investments to funds that invest exclusively in single securities or narrow sectors of the market. With the many different investment styles and objectives, there's bound to be a number of mutual funds that are suited to your investing profile. Each of these funds has expense, risk, and return characteristics. Be sure you understand these characteristics before you invest.
Fund investors can cash in on any business day. When you sell a stock, you must wait three business days before the trade settles and your money is released. Mutual fund investors often cite transaction ease as an inviting factor. And it is hard to beat the convenience of having records and transactions handled for you, while periodically receiving a detailed statement of your holdings.
Aggressive growth funds, sometimes known as "small-cap" funds, seek maximum capital gains. They invest primarily in the stock of smaller, less established companies. Since these companies generally pay little or no dividends, aggressive growth funds rely on capital growth for returns. These funds tend to be the riskiest of growth-oriented mutual funds. Investments in small companies and emerging markets securities are more volatile and carry greater risk than securities of large companies.
Sector funds invest in specific industries or sectors of the economy, such as communications, aerospace and defense, or health care. While they may be diversified within a particular sector, they lack broad diversification. This increases their investment risk. These funds typically seek long-term capital appreciation.
Picture a collection of stocks, bonds, or other securities that are purchased by a group of investors and then managed by an investment company. That's a mutual fund. When you buy a share in a fund, you're really buying a piece of a large, diverse portfolio. Conversely, stocks are shares of a single company. When it comes to managing an investment, some investors prefer leaving those details and skills to someone else.
Often, mutual funds belong to a "mutual fund family." You may be able to shift your investment among different types of mutual funds, often with no more than a phone call. That way your portfolio can easily be tailored to suit your financial situation and your expectations about the market. However, transfers among a fund family are considered sales, which may result in paying capital gains taxes if the fund being sold has appreciated.
Mutual funds make managing your portfolio very easy. Periodic statements will fill you in on the performance of your mutual fund, transactions within your account, and more. You'll also be kept informed about the taxability of your distributions.
There are thousands of different mutual funds offered on the market. They range from funds that include a broad variety of investments to funds that invest exclusively in single securities or narrow sectors of the market. With the many different investment styles and objectives, there's bound to be a number of mutual funds that are suited to your investing profile. Each of these funds has expense, risk, and return characteristics. Be sure you understand these characteristics before you invest.
Fund investors can cash in on any business day. When you sell a stock, you must wait three business days before the trade settles and your money is released. Mutual fund investors often cite transaction ease as an inviting factor. And it is hard to beat the convenience of having records and transactions handled for you, while periodically receiving a detailed statement of your holdings.
Aggressive growth funds, sometimes known as "small-cap" funds, seek maximum capital gains. They invest primarily in the stock of smaller, less established companies. Since these companies generally pay little or no dividends, aggressive growth funds rely on capital growth for returns. These funds tend to be the riskiest of growth-oriented mutual funds. Investments in small companies and emerging markets securities are more volatile and carry greater risk than securities of large companies.
Sector funds invest in specific industries or sectors of the economy, such as communications, aerospace and defense, or health care. While they may be diversified within a particular sector, they lack broad diversification. This increases their investment risk. These funds typically seek long-term capital appreciation.
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