Mutual funds Mutual funds are a key tool for diversification. They are operated by investment companies that raise money from shareholders and invest it in stocks, bonds and other types of securities. Because money from a large number of investors is pooled, a mutual fund has much greater buying power than an individual investor and can buy a wider range of securities than most individuals can afford to purchase on their own. All mutual fund shareholders share equally in the gains and losses generated by the fund. It is important to note that shareholders are responsible for taxes generated by the sale of securities within their funds, even if they have not personally redeemed any of their mutual fund shares.
Mutual funds come in many varieties.
Some invest aggressively for growth, while others are conservative and designed to generate income for shareholders. Investors should consider their risk tolerance and long-term investment goals before deciding which funds would be appropriate for them. Take a profiler test . The information is not intended to be construed as investment advice nor is it an endorsement of any product, service, strategy, individual or organization. Always research your investments thoroughly and understand how they may affect your individual circumstances before committing your money.