The money accumulated in a mutual fund is managed by professionals who decide where to invest it. Decisions are based on the research of the fund's analysts and by the manager's actual visits to the companies. As economic conditions change, the fund may adjust its investments to adopt a more aggressive or defensive position. NAV is the dollar value of one share of the fund and is determined by dividing the current value of the fund by the number of shares currently outstanding. Because the price fluctuates daily, the current value may be more or less than the original amount invested.
Investors can find closing prices published each day in the mutual fund section of most newspapers.
You may be able to invest even less money initially if you establish an automatic investing plan with a mutual fund company. Subsequent investments may be automatically deducted from a payroll or checking account. Most people buy income funds because they pay monthly dividends. This schedule gives investors a chance to budget and pay their bills. Investors may also withdraw income from an equity fund by selling shares under a systematic withdrawal plan.