Difference between revisions of "Mutual fund"

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A '''mutual fund''' is a selection of professionally bought and managed stocks in which money is pooled by an investment company.  The funds continually offer new shares and buys existing shares back on demand and uses its capital to invest in diversified securities of other companies.  
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A '''mutual fund''' is a selection of professionally bought and managed [[stock]]s in which [[money]] is pooled by an [[investment]] company.  The funds continually offer new [[shares]] and buys existing shares back on demand and uses its [[capital]] to invest in diversified [[securities]] of other companies.  
  
The share price of the mutual fund is based on the net value of the [[asset]]s or the value of all the investments owned by the fund, less any [[debt]]s.  The major advantage of mutual funds is a reduced risk - the money is spread across several investments.  If one or two do poorly, the remainder may do better, averaging the loss.  For many small investors, another advantage of mutual funds is that they do not have to watch the [[Stock exchange|stock markets]] constantly, and do extensive research into each stock.
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The share price of the mutual fund is based on the [[net value]] of the [[asset]]s or the value of all the investments owned by the fund, less any [[debt]]s.  The major advantage of mutual funds is a reduced [[risk]] - the money is spread across several investments.  If one or two do poorly, the remainder may do better, averaging the loss.  For many small investors, another advantage of mutual funds is that they do not have to watch the [[Stock exchange|stock markets]] constantly, and do extensive research into each stock.
  
Bond funds are mutual funds that deal in the bond markets.
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[[Bond]] funds are mutual funds that deal in the bond markets.
  
Money market funds focus on the debt instruments sold in the money markets.
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[[Money market]] funds focus on the [[debt instrument]]s sold in the money markets.
  
Equity mutual funds place their investments in the common shares of companies.  
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[[Equity]] mutual funds place their investments in the common shares of companies.  
  
 
==Sources==
 
==Sources==
 
http://usinfo.state.gov/products/pubs/oecon/chap12.htm
 
http://usinfo.state.gov/products/pubs/oecon/chap12.htm
  
[[Category:Investments]]
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{{Template:Economic preparedness topics}}
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[[Category : Economic Preparedness]]
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[[Category : Investments]]
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[[Category : Individual Retirement Accounts]]

Revision as of 12:19, February 21, 2015

A mutual fund is a selection of professionally bought and managed stocks in which money is pooled by an investment company. The funds continually offer new shares and buys existing shares back on demand and uses its capital to invest in diversified securities of other companies.

The share price of the mutual fund is based on the net value of the assets or the value of all the investments owned by the fund, less any debts. The major advantage of mutual funds is a reduced risk - the money is spread across several investments. If one or two do poorly, the remainder may do better, averaging the loss. For many small investors, another advantage of mutual funds is that they do not have to watch the stock markets constantly, and do extensive research into each stock.

Bond funds are mutual funds that deal in the bond markets.

Money market funds focus on the debt instruments sold in the money markets.

Equity mutual funds place their investments in the common shares of companies.

Sources

http://usinfo.state.gov/products/pubs/oecon/chap12.htm