Mutual Funds

• Because of the risks associated with investing in individual stocks, not everyone feels comfortable with giving companies their hard earned money. Some people do not have time to follow the performance of individual stocks or bonds. Because of this, mutual funds have steadily gained popularity over the last few decades.
• A mutual fund is a collection of stocks or bonds, using pooled resources from many investors and managed by professional stock or bond traders.
• Mutual funds allow investors to diversify the number of stocks and bonds they own (their portfolio) while saving them from the stresses of managing a large group of investments.
• Mutual funds can be purchased in smaller amounts, giving investors the ability to buy smaller amounts on a periodic basis.
• Because mutual funds invest in stocks and bonds, investors still are at risk of losing money if the prevailing stock markets or bond markets fall below where shareholders initially invested and they choose to sell their shares.
• There are several varieties of funds, depending on the level of risk and types of investments.