A mutual fund is a pool of money which is used to invest in what ever the
fund specializes. Most mutual funds buy
stocks but some buy gold, bonds,
or other investments. Many funds specialize in certain areas of investment like
China or US technology stocks.
Example: the Fidelity Contrafund is a large fund with a minimum investment of
$2500. Thousands of investors have put money into the fund which, in turn
invests the money in US stocks, the fund's specialty. A large staff monitors the
investments and makes decisions under the direction of the fund manager.
The main appeal of mutual funds is that smaller investors can receive the
same expertise and purchasing power as the large institutions. Investors who buy
mutual funds need only be concerned with the quality and long term performance
of the fund. They do not need to worry about each individual stock or bond
purchase the fund makes. Mutual funds are an excellent way for investors to have
their money handled in a professional manner and take advantage world class
Also See: Atlantic Financial's main
Mutual Fund page.
Back to the top of the page for