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A simple way to get started as an investor in the stock market is to find a mutual fund that has low entry fees, is diversified and has a stable record of performance. This is not a difficult assignment. It is an easy and affordable entry into what for many is a scary and dangerous place--the stock market. But have no fear, the mutual fund is here! Simply put, a mutual fund is a company that invests in a diversified portfolio of securities (stocks and bonds). You can buy shares of a mutual fund and become an owner and shareholder. Your investment in a mutual fund provides the money for a mutual fund to buy securities. A mutual fund will make money from its investments in two ways: a security can pay dividends or interest to the fund, or a security can rise in value. But no investment is fool-proof. Like any investment, a mutual fund can also lose money and drop in value. That being said, a mutual fund is a prudent approach to getting started as an investor. Mutual funds provide diversification, professional management of investments, liquidity, and low costs. There are three basic types of mutual funds:
Mutual funds make saving and investing simple, accessible, and affordable. The advantages of mutual funds include professional management, diversification, variety, liquidity, affordability, convenience, and ease of recordkeeping, as well as strict government regulation and full disclosure. You can research and find current and historical information about mutual funds online. A mutual fund screener can help you find a mutual fund based on several parameters you determine. Yahoo provides a free mutual fund screener. Several resources exist that provide mutual fund charts, forecasting and opportunities to make online investments in mutual funds. You can also track your investments online. You must know the mutual fund symbol or ticker. There are also several newsletters available detailing the strengths and weaknesses of mutual funds. Mutual funds adhere to exacting internal standards but are also highly regulated by the federal government through the U.S. Securities and Exchange Commission ( SEC ). The SEC enforces that all funds meet certain operating standards, observe strict antifraud rules, and disclose complete information to current and potential investors. Additional mutual fund information can be found at:
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Mutual Funds
