| Mutual Fund
A mutual fund is a type of investment vehicle that pools money from many investors to purchase securities such as stocks, bonds, or other assets. The goal of a mutual fund is to diversify the investors' portfolios and provide professional management of their investments
Here's a breakdown of key features:Diversification: By pooling money from many investors, a mutual fund can invest in a wide variety of securities, spreading out the risk. This helps reduce the impact of a poor-performing investment.
Professional Management: Mutual funds are managed by professional portfolio managers who make decisions on buying and selling investments in accordance with the fund's objectives.
Liquidity: Investors can typically buy and sell mutual fund shares at the end of the trading day at the net asset value (NAV), which is the price of one share of the fund based on the total value of the fund's holdings.
Types of Mutual Fund
Equity Funds: Invest primarily in stocks.
Bond Funds: Invest in bonds and other fixed-income securities.
Balanced Funds: Invest in a mix of stocks, bonds, and other assets to provide a balance between risk and return.
Index Funds: Track the performance of a specific market index, like the S&P 500.
Money Market Funds: Invest in short-term, low-risk securities.
