This is the third article in a series on investment basics. If you are new to investing, it is recommended that the articles be read in order.
Prior articles introduce terminology that is used in later articles.
A mutual fund is an investment vehicle in which investors pool their money in order to allow each investor to participate in a portfolio of securities. The investor does not own the individual securities but instead owns a shares of the mutual fund. The first mutual fund in the nation was the Massachusetts Investors Trust introduced publicly in Boston in 1924. At the end of 1995, the fund had 73,500 investors and assets of 1.8 billion dollars. There are now well over 7000 mutual funds available.